CANADA ECONOMICS

NAFTA

Innovation, Science and Economic Development Canada. September 27, 2017. Statement from the Honourable Bardish Chagger on the conclusion of the third round of NAFTA modernization in Ottawa. Statements

Ottawa — The Honourable Bardish Chagger, Leader of the Government in the House of Commons and Minister of Small Business and Tourism, issued the following statement after today’s conclusion of the third round of negotiations on the modernization of the North American Free Trade Agreement (NAFTA):

“I commend the negotiating teams from Canada, the United States and Mexico on their progress during the third round of negotiations on NAFTA modernization.

“The provisional agreement reached on the SME chapter is an important early demonstration of this progress. The chapter recognizes the integral role small and medium-sized enterprises, including micro-businesses, play in driving growth and creating good, well-paying middle-class jobs in all three countries.

“This new chapter will enhance cooperation on SME issues and ensure that SMEs are able to fully capitalize on the many commercial opportunities created by a modernized NAFTA. This is about helping small business owners access new markets and increase export opportunities. This would be achieved, notably, through a website designed to help SMEs navigate the agreement, as well as a trilateral SME dialogue bringing together SMEs, non-governmental organizations, academic experts and other stakeholders.

“We are committed to hearing directly from Canadians about their priorities. The new SME chapter reflects what we heard from small business stakeholders during our ongoing consultations. I am proud that our negotiating team, led by the Honourable Chrystia Freeland, Minister of Foreign Affairs, is advancing the interests of Canadian small businesses at the negotiating table.

“This chapter is only one piece of the puzzle. As we work with our partners to finalize the broader agreement, the government will continue to represent the interests of Canadian small businesses, especially for those chapters that affect them directly.”

Stakeholder quotes

“On behalf of Canada’s Small Business Matters Coalition, representing close to 200,000 small and medium-sized businesses in Canada, we welcome the announcement today that a chapter devoted to the interests of SMEs is being added to NAFTA. We applaud ministers Chagger and Freeland for this breakthrough in having the unique challenges faced by SMEs recognized formally in this agreement.”
– Gary Sands, Chair, Small Business Matters Coalition

“Helping SMEs take advantage of free trade agreements is critical because most do not. The measures announced today send a strong signal to Canada’s nearly 90,000 manufacturing SMEs, which employ over 1.36 million Canadians, that all three governments recognize the importance of the contributions they can make to strengthening the manufacturing sector.”
– Dennis A. Darby, President and CEO, Canadian Manufacturers & Exporters

"Startup Canada commends Minister Chagger and Minister Freeland for championing the interests of start-ups and small businesses in the recent NAFTA negotiations. The SME chapter announced today will support Canadian entrepreneurs to excel in the global market and is a step forward in creating the favourable environment needed for the growth and scalability of Canadian businesses."
– Victoria Lennox, CEO,  Startup Canada

BOMBARDIER. The Globe and Mail. 28 Sep 2017. Bombardier duties threaten to ratchet up tensions in NAFTA talks. Bombardier, which operates a plant in Belfast, seen on Sept. 13, may be shut out of the U.S. market if punishing duties are not lifted.
ADRIAN MORROW, WASHINGTON
NICOLAS VAN PRAET, MONTREAL, With a report from Reuters

The Trump administration’s decision to hammer Bombardier with a 220-per-cent tariff on its C Series jets is threatening to devolve into a blow-for-blow battle between Canada and its largest trading partner, cranking up tensions amid the renegotiation of the North American free-trade agreement.
Commerce Secretary Wilbur Ross announced preliminary countervailing duties late Tuesday as his colleague, trade tsar Robert Lighthizer, sat down to dinner with his Canadian and Mexican counterparts at the third round of NAFTA talks in Ottawa.
The tariff is ostensibly meant to protect Boeing, which accuses Bombardier of being unfairly subsidized by the Canadian, Quebec and British governments. But Mr. Ross’s duty rate goes far beyond the 80 per cent Boeing requested.
The move could give the United States added leverage at the NAFTA table.
It could, however, backfire by toughening Canada’s resolve on the already-thorny matter of the Chapter 19 dispute-resolution provision. »
And it could also serve a narrower purpose: Ratcheting up pressure on Canada to agree to a deal with the United States to limit Bombardier’s competitiveness.
Foreign Affairs Minister Chrystia Freeland said on Wednesday she pressed Mr. Lighthizer on the matter during NAFTA talks. She said she has already spoken several times with Mr. Ross on the matter and was scheduled to speak with him again, and she met last week with Boeing president Marc Allen in New York.
“We all know that it’s an administration that’s openly protectionist. It’s an administration that talks openly of an ‘America first’ policy. That’s the reality Canada has to work with,” she told reporters in Ottawa. “We will continue to work directly on each issue. It’s what we have to do.”
Trade Minister François-Philippe Champagne doubled down on Prime Minister Justin Trudeau’s threat to retaliate by shredding a plan to buy Boeing Super Hornet fighter jets.
“We will not do business with a partner who is not reliable and Boeing today showed that it is not a reliable partner in this matter,” Mr. Champagne said before a caucus meeting Wednesday.
In Quebec City, Premier Philippe Couillard encouraged the federal government to hold a “very hard line” and not allow “a bolt, a part and certainly not a plane” from Boeing to be imported into Canada until the fight is resolved. “Quebec is being attacked. Quebec will resist,” he told reporters in a prepared statement.
The politicization of what is normally an administrative process for settling trade disputes is very unusual, said Chad Bown, a former White House and World Bank trade economist. But U.S. President Donald Trump set a precedent earlier this year by personally speaking out on the softwood-lumber dispute.
“Normally, government leaders don’t get involved in this stuff. It’s purely a bureaucratic process that plays out behind the scenes,” said Mr. Bown, senior fellow at the Peterson Institute for International Economics, a Washingtonbased think tank. “But Trump opened the door to this back in April when he weighed in on softwood.”
Mr. Trump is probably hoping the dispute gives the United States leverage in NAFTA talks, allowing it to hold out the option of a resolution in exchange for concessions at the bargaining table, Mr. Bown said.
Mr. Trudeau’s gambit – making an overt threat early in the process – appears to be an attempt to end the dispute by setting out the consequences to the United States, Mr. Bown said. Still, the Prime Minister risks provoking a tit-for-tat fight.
The Canadians are “trying to head off that outcome, trying to make clear ‘We’d both be better off not doing this to each other,’ ” he said. “It’s certainly risky. I’m not sure that escalating this is the right way to go.”
The fight could harden Canada’s position in NAFTA talks: Ottawa has promised to protect the Chapter 19 dispute-resolution system, which Canada could use to challenge the duties on Bombardier. Canada doesn’t trust the United States to make fair anti-dumping and countervailing duty decisions and sees Chapter 19’s binational panels as a safeguard.
“The smartest thing the United States could do is not impose duties, then they could say ‘justice is blind,’ ” Dunniela Kaufman, a Washington-based trade lawyer who specializes in U.S.Canada business, said in an interview.
Mr. Lighthizer tried to play down the effect the fight would have on NAFTA. “I’m not saying it doesn’t have an effect on relationships, it does – but not on this negotiation,” he said on Wednesday.
The United States’ anti-dumping and countervailing duties system is meant to protect American companies from unfair competition by punishing foreign firms that benefit from unfair advantages. The preliminary countervailing duties announced Tuesday are only the first step. Mr. Ross must next decide whether to also levy preliminary anti-dumping duties as well. Then, the U.S. International Trade Commission will decide whether to make these penalties permanent.
Punishing duties would almost certainly close the U.S. market to sales of Bombardier’s C Series, putting at risk thousands of aerospace jobs in Canada, the U.K. and the United States if alternatives aren’t found.
One possibility would be for the United States and Canada to negotiate a so-called suspension agreement, similar to the ones that cover tomatoes and sugar imported from Mexico by the United States. Under such a deal, Washington would lift the duties in exchange for C Series jets being sold above a specified price or limits on the number of jets sold in the United States.
Daniel Ikenson, director of trade-policy studies at Washington’s free-market Cato Institute think tank, said it is hard to find a parallel for this standoff. The closest comparison, he said, is how China deals with other countries by using public procurement to mete out punishments or rewards.
“It is unusual for market economies and friendly neighbours to engage in this kind of leverage,” he said. “Trudeau would probably have been a little bit embarrassed to deal with [former president Barack] Obama this way. But leaders think this is how you have to deal with Trump.”

The Globe and Mail. 28 Sep 2017. U.S. takes tough stand on trade deficit in NAFTA talks
ROBERT FIFE, OTTAWA,  BUREAU CHIEF

The Trump administration took a hard line on shrinking the U.S. trade deficit with Canada and Mexico as the third round of negotiations on rewriting the North American free-trade agreement concluded in Ottawa on Wednesday with little substantive progress.
Washington’s unshakeable focus on reducing its trade deficit in the NAFTA talks was immediately challenged by Foreign Affairs Minister Chrystia Freeland and her Mexican counterpart, and suggests the outcome of the negotiations is far from clear.
“We never said this would be easy,” Ms. Freeland said after hosting her ministerial counterparts. “Canada does not share the view that deficits or surpluses are the best way or even a particularly good way of measuring the way a trade deal works.”
Ms. Freeland would not say whether the U.S. stand on trade deficits and protectionist measures against aircraft manufacturer Bombardier Inc. and Canadian softwood lumber are signs the Americans want to dissolve NAFTA, as Donald Trump vowed to do during his presidential election campaign.
That promise has loomed since talks began in Ottawa on Sunday, because U.S. negotiators have failed to table their demands on the most contentious issues, including rules of origin for automobiles and manufacturing, and changes to trade-dispute settlement mechanisms.
“I do not have the superpower that allows me to look into the heart of a counterparty and divine their true intention,” Ms. Freeland told reporters when asked if the United States is serious about negotiating a new deal.
U.S. Trade Representative Robert Lighthizer certainly did not mince words at the end of five days of NAFTA talks in Ottawa, saying he wants to “reduce the trade deficit” by improving access for exporting U.S. goods to Canada and Mexico under the threecountry pact. “We are committed to a substantial renegotiation that reinvigorates U.S. industry and ensures reciprocal market access for American farmers, ranchers and businesses,” Mr. Lighthizer told a news conference.
Ms. Freeland took direct aim at Mr. Lighthizer’s suggestion that Canada got a better deal out of the 23-year-old NAFTA than the United States. She reeled off figures indicating that the United States had an $8.1-billion surplus with Canada on total trilateral trade of $634.8-billion in 2016. When it comes to manufactured goods, the U.S. surplus with Canada is $34.2-billion and $9.1-billion in auto parts, she said.
“Our trade with United States is reciprocal and usually beneficial and nearly perfectly in balance,” Ms. Freeland said.
Mexican Economy Minister Ildefonso Guajardo was even more blunt, likely because his country is the most threatened from Mr. Trump’s insistence on making significant changes to NAFTA.
“For the next round in Washington, we will have substantial challenges to overcome,” Mr. Guajardo said, warning that Mexico will not sign any deal that puts it at a disadvantage.
The U.S. trade deficit with Mexico is $64.3-billion (U.S.) – a theme that Mr. Trump emphasized throughout the campaign, particularly in his calls to stop U.S. auto giants from moving plants and jobs south of the border.
“NAFTA represents more than just the trade figures and numbers,” Mr. Guajardo said. “NAFTA represents the commitment that we share to make North America the most competitive region in the world. But let me clear: That view requires from us to increase our trade opportunities and not to diminish them.”
The next round of NAFTA talks, in Washington from Oct. 11 to 15, will likely be more difficult.
“It is true on some of the hardest issues, proposals have not been tabled, so we haven’t gotten to those,” Ms. Freeland said.
The United States is expected to table proposals for rules of origin for automobiles and auto parts that will call for higher U.S. and North American content to qualify for duty-free access, and to reform dispute-settlement mechanisms to favour U.S. businesses.
Those talks are also expected to focus on rules in NAFTA’s Chapter 19 for settling disputes between members. Canada could use those rules to challenge the Bombardier decision, and it has threatened to walk away from the talks if the United States tries to eliminate Chapter 19.
On Tuesday, the U.S. Commerce Department imposed duties of nearly 220 per cent on Montrealbased Bombardier’s C Series jets. It followed an earlier ruling against Canadian softwood lumber.
Ms. Freeland objected to the Bombardier decision in bilateral talks with Mr. Lightizer, but said the dispute would not affect the NAFTA talks.
“This is familiar and accustomed behaviour,” she said, referring to U.S. Commerce decisions against Canadian softwood lumber and Europe’s Airbus jets. “These Commerce rulings are quite separate from our NAFTA modernization negotiations.”
Mr. Lightizer told Reuters that the U.S. decision on Bombardier has not been finalized.
“There are several more stages. We don’t even know whether it is going to be successful, and in addition there are off-ramps in the litigation,” he said. “It’s too early to tell.”
Asked whether the dispute could affect NAFTA talks, Mr. Lighthizer said: “I’m not saying it doesn’t have an effect on relationships – it does, but not on this negotiation.”
The talks in Ottawa produced little other than a chapter to help small businesses learn how to gain access to the markets of all three NAFTA countries.
However, Ms. Freeland said negotiators made “meaningful advances” in telecommunications, digital trade, good regulatory practices and customs and trade facilitation.
The three countries are rushing to finish talks by February, 2018, before Mexico’s presidential election and U.S. congressional midterm votes, even though trade experts call the deadline impossible.

The Globe and Mail. 28 Sep 2017. Small wins don’t overshadow looming large battles in NAFTA talks
CAMPBELL CLARK

The gloom and doom started to really set in around the NAFTA talks on Tuesday evening. U.S. negotiators had started to put forward proposals that were so aggressive that some observers were calling them poison pills.
This was more than the everyday anxiety over the future of the North American free-trade agreement that Canadian and Mexican officials have got used to since Donald Trump became U.S. President. They have responded to that by putting on their game faces and talking about making a deal. Away from cameras, the faces are longer now.
If you watched Wednesday’s closing statements to the media after the third round of negotiations, and looked past Foreign Affairs Minister Chrystia Freeland’s celebratory announcement that a chapter on small business had been completed, you could glimpse trouble.
U.S. Trade Representative Robert Lighthizer insisted the Americans want a deal that undoes their trade deficits. Mexican Economy Secretary Ildefonso Guajardo said countries need the “will” to table workable proposals, stated that the next round will have “substantial challenges” and warned Mexico wants a deal that increases rather than diminishes trade opportunities. Ms. Freeland said she would not comment on Mexico-U.S. issues as she skirted questions about whether the United States was deliberately proposing non-starters: “I do not have the superpower that allows me to look into the hearts of a counterparty and divine their true intention,” she said.
But many among the hundreds who stick close to these talks now believe there will be no deal – and even that the negotiating positions the United States put forward this week are really setting the ground for Mr. Trump to trigger a withdrawal from NAFTA.
“The prevailing view is it’s coming. Probably late 2017, early 2018,” said Dan Ujczo, an international trade lawyer with crossborder law firm Dickinson Wright, who was in Ottawa to keep tabs on the talks. “The mood [on Tuesday] night was clearly despondent.”
The information dribbling out of the talks did not bode well. The U.S. proposal on labour, initially described as being like the rules Mexico and Canada accepted in the now-dead Trans-Pacific Partnership, also calls for Mexico to increase its minimum wage sharply. Mr. Ujczo said the Mexicans told him that what the U.S. team was talking about could work out to an eight-fold increase. The United States also made aggressive demands regarding seasonal growers, poking a pointy stick into a long-running trade war between Mexico and Florida tomato growers that is something like the Canada-U.S. softwood dispute.
NAFTA could face “death by a thousand cuts,” Mr. Ujczo said.
The United States has yet to put forward its proposals on key contentious issues, such as rules of origin for autos that determine whether a vehicle is North American enough to cross borders duty-free, but fears are now that they’ll be ugly.
Unworkable demands might be dismissed as a tactic, and a very Trumpian one, too. Even triggering the six-month process for withdrawal from NAFTA could be a way to press for a better deal later. But letting the talks run into mid-2018 is dangerous, too.
The three countries have said they want a deal by February – and that’s not just to suit Mr. Trump’s impatience.
Mexico’s presidential election will be held next July, and some fear that if NAFTA isn’t signed and sealed by then, the candidates won’t be able to resist capitalizing on anti-Trump sentiment and opposition to doing a NAFTA deal with the U.S. President.
“I call it the pinata effect,” said Moises Kalach, head of trade negotiations for Mexico’s business lobby, the Consejo Coordinador Empresarial. “Put it out there, and it will be very popular to hit it.”
And the U.S. Congress has midterm elections in November, 2018 – so if a renegotiated NAFTA is going to the Congress for approval, it’s going to be a political football. Even if the February deadline is met, it will be controversial in primary campaigns; if not, it will be debated in election races. Most politicians in the U.S. Congress don’t want to have to say how they would vote on a NAFTA 2.0 – that is, except those that want to kill it. And around the talks this week, there has been more gloom about whether the United States will ever negotiate a new NAFTA anyway.

BOMBARDIER. The Globe and Mail. 28 Sep 2017. Editorial. These planes fly on the wings of politics

The Bombardier-Boeing dogfight is one of those strange cases where both sides are fibbing, and both sides are telling the truth.
Boeing claims, and the U.S. International Trade Commission and Commerce Department agree, that Bombardier received subsidies from Canada, Quebec and other governments, making possible the development and sale of its C Series jets. To which the correct reply is: No kidding, Sherlock.
Canadian governments have for decades nurtured Bombardier in a rich ecosystem of taxpayer assistance. Most recently, when the C Series project got into financial trouble, Quebec City invested $1-billion, acquiring a 49.5-per-cent ownership in the jet, and Ottawa gave the company $372.5-million in repayable loans. And that’s just the last two years.
But anyone who sees Boeing as a paragon of free enterprise needs to make an appointment with an optometrist, immediately. The plane maker has long feasted on a host of United States government supports and military contracts – and it’s the largest client/dependent of the government’s U.S. Export-Import Bank. The bank is jokingly mocked inside the Washington Beltway as the “Bank of Boeing,” because of how much of its operations are dedicated to providing the kind of financing that helps sell Boeing planes to foreign airlines.
Boeing can claim that it only needs government support because its European, Brazilian and Canadian competitors are receiving it; competitors such as Bombardier can point the finger right back. Everyone is bending the rules, and everyone justifies it because everyone else is doing it. Mom, I only took a cookie because he did it first.
Did Bombardier sell C Series jets to Delta Air Lines at a price well below the official list price? Yes. Can Boeing sometimes offer jets at discounted prices, thanks to government assistance? As surely as the Earth rotates around the sun.
By imposing an absurdly high 220-per-cent tariff on Bombardier C Series jets, is the U.S. government using its power to defend Boeing’s corporate interests? Absolutely. The penalty is nearly three times what Boeing asked for, and, if it is upheld, it will triple the price of C Series jets sold into the U.S. The likely consequence of that would be to make the plane too expensive for any U.S. airline currently considering it.
The U.S. government is effectively trying to ruin a potential competitor to one of its largest industrial employers.
But, of course, Washington is arguing that it’s only delivering this kneecapping to compensate for the fact that Bombardier gets so much support from Ottawa, Quebec and even the United Kingdom.
And when Prime Minister Justin Trudeau said not long ago that the government of Canada would scupper its plan to buy $6-billion worth of Boeing Super Hornet fighter jets, unless Boeing dropped this trade complaint against Bombardier, he only highlighted the intimacy of the relationship between Ottawa and a private company, and the lengths to which the government of Canada will go to defend the latter.
“We won’t do business with a company that’s busy trying to sue us and put our aerospace workers out of business,” said Mr. Trudeau.
The PM referring to Bombardier as “us” was a telling Freudian slip. The willingness of the Canadian government to use national defence as a pawn in a trade dispute was just one more reminder of the connection between taxpayers and Bombardier.
On Wednesday, Quebec Premier Philippe Couillard further underlined it, saying that the announcement of tariffs on Bombardier means that, “Quebec is being attacked. Quebec will resist.”
Final irony: When Delta did its deal with Bombardier, there was no Boeing plane offered that could compete with the C Series. The claim that Boeing was harmed by that sale, or will be in future, is an awesome nose-stretcher, which Washington has of course entirely bought.
This is a trade fight fuelled by Washington politics, over an airplane that got airborne thanks to Canadian politics. Ottawa, Quebec City and Washington are all unable to act as anything approaching unbiased judges in this case. Washington is wearing referee’s stripes while playing for one team; Quebec City and Ottawa are doing the same on the other side.
In an ideal world, the global aerospace industry wouldn’t be a cesspool of subsidies. Do not expect to experience that world anytime soon.
On this planet, the best hope for an eventual resolution is the North American free-trade agreement’s Chapter 19 indepenent dispute resolution panels. Without them, the 220-per-cent tariff imposed by Washignton would stand. But as long as Chapter 19 is in operation, that’s unlikely to be the final outcome.

BOMBARDIER. The Globe and Mail. 28 Sep 2017. May ‘bitterly disappointed’ by Bombardier ruling in U.S. Northern Ireland already hit hard by cutbacks, union representative says. British Prime Minister Theresa May has expressed bitter disappointment at the U.S. government’s decision to slap hefty duties on Bombardier Inc.’s
PAUL WALDIE

C Series jets, a move that threatens thousands of jobs in Northern Ireland.
“Bitterly disappointed by initial Bombardier ruling,” Ms. May’s office said in a statement posted on Twitter Wednesday morning. “The government will continue to work with the company to protect vital jobs for Northern Ireland.”
The decision by the U.S. Department of Commerce to back Boeing Co. and put countervailing duties of nearly 220 per cent on imports of C Series jets will have sweeping ramifications for Northern Ireland where Bombardier is a major employer. The Montrealbased company accounts for roughly 4,200 direct jobs, mainly in Belfast, and another 9,000 indirect positions across the province.
“The importance of Bombardier to Northern Ireland’s manufacturing economy and jobs cannot be overstated,” said Stephen Kelly, chief executive of the industry group Manufacturing NI. He added that Bombardier accounts for around 10 per cent of Northern Ireland’s total exports.
“They are a strategically important and critical part of the Northern Ireland economy. So anything that undermines Bombardier’s investment in Northern Ireland, undermines the entire economy in Northern Ireland,” Mr. Kelly said.
The U.S. decision won’t take effect until Bombardier begins delivering C Series jets to the United States, but Tuesday’s preliminary ruling has sparked concern in Northern Ireland and across the border in Ireland, where many Bombardier workers live.
Most of the Belfast operation involves making wings for the C Series and the plant is becoming more and more dependent on the aircraft. “The reality is that for us, in three years time, the C Series stands to be 60 per cent of the work in Northern Ireland for Bombardier,” said Davy Thompson, a regional co-ordinator in Belfast for Unite, a labour union that represents some of the Bombardier workers. “So really if the program was slowed, or they don’t pick up orders because of any penalties, that would give a serious concern for the future.”
Mr. Thompson added that Northern Ireland has already been hit hard by cutbacks at Bombardier. Roughly 1,000 jobs have been lost at the company’s four plants in the past two years because of restructuring. Just last week, another 95 jobs were cut in Belfast. “So anything that impacts on the future of C Series could have serious long-term damage for the Belfast site,” he said.
“It’s devastating news,” added Ross Murdoch, a national officer with the GMB, another union that represents Bombardier workers. Mr. Murdoch said he expects the appeal process to drag out for months but “all the while, the workers in Northern Ireland will be absolutely beside themselves with worry about the future.” He called on Ms. May to use Britain’s influence with Boeing to put pressure on the company. Britain has ordered 50 Apache attack helicopters and is considering further purchases of military planes.
On Wednesday, Britain’s Defence Secretary Sir Michael Fallon said the dispute could jeopardize those contracts. “This is not the behaviour we expect from Boeing and it could indeed jeopardize our future relationship with them,” Sir Michael told reporters in Belfast.
“Boeing has significant defence contracts with us and still expects to win further contracts. Boeing wants and we want a long-term partnership but that has to be two-way.”
Business Secretary Greg Clark told Sky TV that the British government had been working closely with Canadian officials to have the ruling overturned by the U.S. International Trade Commission.
“What needs to happen now by the trade commission is that they look to see whether there has been any detriment to Boeing,” he said. “There hasn’t been because this aircraft does not compete with Boeing so we’re confident that we will be able to demonstrate that and have this case dismissed.”
The Boeing dispute also comes at a time of political uncertainty in Northern Ireland and the rest of the U.K. The province has been without a government since January after a power-sharing deal collapsed between the two main parties; the Democratic Unionists and Sinn Fein. An election last March failed to break the impasse and several labour and business groups, including executives from Bombardier, have expressed frustration at the lack of a First Minister to advocate for Northern Ireland. “This announcement comes at a time where we have no government and no one able to fight on behalf of the workers of Bombardier directly with the U.S. government or indeed their representation here in Northern Ireland,” said Mr. Kelly of the manufacturing group.

BOMBARDIER. REUTERS. SEPTEMBER 28, 2017. Britain's May fires warning to Boeing over Bombardier trade dispute
William Schomberg, David Milliken

LONDON (Reuters) - Prime Minister Theresa May told U.S. planemaker Boeing (BA.N) on Thursday that its behavior in a trade dispute with Canada’s Bombardier (BBDb.TO) was undermining its commercial relationship with Britain.

May intervened in the trade row between Canada and the United States after a complaint by Boeing led to the U.S. Department of Commerce imposing a preliminary 220-percent duty on Bombardier’s CSeries jets.

The U.S. ruling puts as many as 4,200 jobs at risk at a plant in the British province of Northern Ireland, where the carbon wings for the jets are made.

“We have a long-term partnership with Boeing in various aspects of government and this is not the sort of behavior we expect from a long-term partner and it undermines that partnership,” May said in response to a question at a Bank of England event.

Boeing, the world’s biggest plane maker, has said it is committed to the United Kingdom and values its partnership.

May’s criticism of Boeing indicates the importance of the plant to the small Northern Irish political party on which her government has relied since she lost her parliamentary majority in June following a botched election campaign.

Britain would nevertheless find it difficult to unpick its relationship with one of its most important defense equipment suppliers.

May also needs U.S. President Donald Trump’s support as Britain prepares to sever ties with the European Union. She has pitched a new trade deal with the United States to cushion the impact of leaving the EU’s tariff-free single market.

But May could find it difficult to convince Trump, who has made ‘America First’ a theme of his administration, to get one of the titans of U.S. industry to back off from defending what it views as its trade rights.

May, who had raised the issue with Trump, said she would try to work with Canada’s government to stress the importance of Bombardier to Northern Ireland.

CONTRACTS

On Wednesday, Boeing said it had listened to Britain’s concerns but gave no indication that it might change tack in the dispute.

Boeing said that since 2011 it had tripled its spending in the United Kingdom to 2.1 billion pounds ($2.8 billion) in 2016, while the firm and its suppliers accounted for more than 18,700 UK jobs.

British defense minister Michael Fallon has also criticized Boeing. He ruled out cancelling existing orders with Boeing for nine P-8 spy planes and 50 Apache helicopters, but added the U.S. firm was seeking other UK contracts.

Boeing has risen since 2000 from a relatively minor defense supplier in Britain to become one of the country’s top five following the purchase of C-17 transporters and Apache attack helicopters, according to defense analyst Francis Tusa.

Possibilities for reprisals are relatively limited in the short term but further ahead, potentially valuable requirements include the replacement of the Boeing-built Chinook helicopter.

Britain could also consider moving lucrative maintenance and support work for the C-17 transport plane from the United States to Britain, he added.

“What is going to be fascinating is that the Bombardier case will open the eyes of senior service chiefs to the fact that Britain is less important to the United States,” Tusa said.

May’s comments came in a question and answer session after she had delivered a robust defense of capitalism and free markets in a speech designed to halt the rising popularity of a more radical interventionist economic model espoused by her political opponents, the Labour Party.

Labour said the trade dispute should be referred to the World Trade Organization, and criticized May for “threatening to victimize Boeing”.

Britain is already involved in the world’s largest trade dispute, involving mutual claims of illegal aircraft subsidies between Europe and the United States. The case has led to years of dispute over a type of UK government funding for Airbus that also went to Bombardier.

Writing by William James and Tim Hepher; Editing by Guy Faulconbridge and Catherine Evans

BOMBARDIER. The Globe and Mail. 28 Sep 2017. Opinion. Boeing-Bombardier dispute is Trumpism at its worst. Here’s hoping the ITC does its job well and puts this frivolous dispute to bed before Bombardier delivers its first C Series plane to Delta in the spring.
PATRICK LEBLOND, Senior fellow at the Centre for International Governance Innovation and holds the CN – Paul M. Tellier Chair on Business and Public Policy in the Graduate School of Public and International Affairs at the University of Ottawa

On Tuesday evening, the U.S. Commerce Department concluded that Bombardier Inc. had received unfair subsidies from the Canadian and Quebec governments. This means that a countervailing duty of 220 per cent will be temporarily imposed on any Bombardier C Series aircraft sold in the United States, and there’s an additional anti-dumping duty on deck.
Although couched in terms of fair-trading practices by U.S. Commerce Secretary Wilbur Ross, these decisions could have serious negative consequences for both Bombardier and the North American economy. Bombardier’s chief U.S. competitor, Boeing, stands to gain absolutely nothing from this dispute. How did we get here?
In April, Boeing asked the Commerce Department and the United States International Trade Commission to investigate the sale of new C Series planes to Delta Air Lines for a reported $6-billion (U.S.). Boeing claims Bombardier sold the planes well below cost, which amounts to dumping. In addition, Boeing argues Bombardier was able to sell its planes so cheaply because it received illegal subsidies from the Quebec and federal governments in the form of an equity investment and a loan, respectively.
Following the Commerce Department’s recent decisions, this process will move to the U.S. International Trade Commission, which has to determine whether Boeing suffered any material injury as a result of the contract between Bombardier and Delta. If the ITC rules against Boeing, then the dispute is over.
Demonstrating that it has suffered material injury will be a challenge for Boeing because it no longer builds airplanes that compete with the C Series. It’s telling that Boeing did not compete for the Delta contract. A recent letter to the ITC from JetBlue CEO Robin Hayes confirmed that Boeing does not make a comparable aircraft. Mr. Hayes wrote that he fears the dispute could be bad for the industry, especially for low-cost airlines such as his that rely on smaller aircraft operating shorter routes.
So here begins another story of the unintended and incredibly far-reaching consequences of Trump & Co.’s “America First” thinking on trade.
First, if duties of more than 300 per cent (both countervailing and anti-dumping) are applied to C Series planes sold to airlines in the United States, then Delta will end up buying planes that will be unprofitable or it will cancel the order with Bombardier, citing some kind of force majeure.
If Delta cancels the contract, then 75 to 125 C Series planes will not be built. Given that a significant portion of the aircraft’s parts comes from the United States, this means American jobs will be lost.
Other airlines such as JetBlue will keep their distance from the C Series and will likely have one supplier of comparable aircraft: Brazil’s Embraer. With a monopoly, surely the latter will increase its prices. This will mean lower profits for U.S. airlines and higher prices for travellers.
Sales of Embraer aircraft to U.S. airlines will not replace the U.S. jobs that would be lost because the company builds these commercial planes in Brazil and likely sources fewer parts in North America. (Bombardier builds the C Series in Montreal.)
Finally, if Boeing’s legal tactic is successful in breaking Bombardier’s back by blocking the U.S. market – which accounts for an estimated 35 per cent of potential C Series sales – then it could be all for nothing.
The company that sells C Series aircraft, a subsidiary created by Bombardier as a sort of safeguard in case of dispute, would end up in receivership and would have to be sold or liquidated. In such a scenario, the Chinese would surely be interested in buying the technology and know-how of what many consider the best aircraft in its category. A Chinese-owned C Series would probably be an even fiercer competitor for Boeing, especially if it moves into building larger aircraft.
Here’s hoping the ITC does its job well and puts this frivolous dispute to bed before Bombardier delivers its first C Series plane to Delta in the spring. Otherwise, Bombardier will have to appeal to the U.S. Court of International Trade. It could also ask the federal government to set up a binational panel under NAFTA’s Chapter 19; however, this could embolden U.S. negotiators into asking for its removal in NAFTA 2.0 (unless the negotiations are over by then).
These appeal procedures take time, which Bombardier does not have – unless the Canadian and Quebec governments decide to pony up more financial support. Even if such actions trigger even higher duties, it would not matter because no planes will be sold in the United States.
This dispute is Trumpism at its worst. For the United States, it could ultimately mean no duty revenues, fewer manufacturing jobs, lower airline profits, higher prices for travellers and a fiercer competitor. What a way to make America great again.

The Globe and Mail. 28 Sep 2017. Opinion. NAFTA talks have nothing to do with trade – and that’s the danger
PETER DONOLO, Vice-chair of H+K Strategies, former director of communications for prime minister Jean Chrétien

Canada, the United States and Mexico have just completed the third round of NAFTA renegotiations, yet participants from all sides are still scratching their heads because, as one Canadian source told The Globe and Mail, “really nobody knows what Donald Trump wants.”
The reason for this is simple, although it can’t be said in the polite language of diplomacy or trade negotiations. The fact is, the NAFTA talks have been triggered not by actual trade problems or by the need to recalibrate or adjust practices, but by politics, pure and simple – and really not so pure.
To paraphrase Bill Clinton’s mantra of 25 years ago, it’s the politics, stupid. In his norm-shattering campaign, Mr. Trump set up scapegoats, from immigrants to minorities to the North American free-trade agreement, as the source of all of America’s problems – or at least his supporters’ roiling anger. And far from moderating in office, Mr. Trump has continued to pour oil on these interrelated fires. In fact, he needs the rage and controversy, both to fuel his base and distract from his legislative failures.
In that sense, the world-class talent recruited around the negotiating table in Ottawa has been given an impossible mission. They could come up with any number of innovative improvements to NAFTA. But it’s a little like assembling the world’s greatest medical specialists to cure a hypochondriac. You can’t cure an illness that doesn’t exist – especially when the patient refuses to admit he’s not sick.
What does that mean for the NAFTA talks? Don’t hold your breath for negotiators to come up with trade solutions to a political problem. And if they do manage an agreement, count the seconds for a tweet from the President of the United States undercutting his own negotiating team. He’s done it to his own White House staff, to his cabinet and to his party, time and again.
The term “win-win,” which is the essence of any successful negotiation, does not exist in Donald Trump’s lexicon. His approach is better described as zero-sum; the only way you can show you have won is by crushing your opponent into dust.
That means there are two likely outcomes.
Most simply, Mr. Trump may reject any negotiated agreement as not punishing enough to the Americans’ trading partners. After all, this has been his modus operandi in so many other areas, so why not here?
Conversely, he may grasp such an agreement and cloak it in the language of historic victory for the United States and ignominy and humiliation for Mexico and Canada. There is a method to this madness; he’s used this kind of delusional hype to describe the size of the crowd at his inauguration and the historic quality of his own speech to Congress.
For Canada, this would be a victory of sorts. It would validate the immense and complex outreach campaign the Trudeau government has deployed at all levels in the United States. We could simply grin and bear all the Trumpian trash talk about how we got rolled or “choked like a dog” (one Mr. Trump’s favourite putdowns), and be content for having largely saved an important trade agreement. After all, that would be the Canadian way.
But conflict can escalate out of control in unpredictable and dangerous ways. And political conflict is no exception.
In less than a year, Mexico will hold presidential elections. Mr. Trump’s relentless humiliation of that country has already sunk the hopes of the incumbent PRI and boosted the chances of leftist Andrés Manuel López Obrador. What would be the consequences of a NAFTA “loss” for Mexico? From the relative stability of recent decades, the Mexican-U.S. relationship could very quickly revert to earlier hostile, and even violent, patterns.
Even here in the peaceable North, the consequences are hard to predict. Would the broad Canadian consensus of support for NAFTA survive a heavily ballyhooed NAFTA victory for Mr. Trump?
And what if NAFTA doesn’t survive? What would our political way ahead be, after having put so many eggs in that one basket?
When you have a political arsonist as commander-in-chief, the fires can spread quickly to your neighbour’s property. And they can take a long time to put out.

BOMBARDIER. The Globe and Mail. THE CANADIAN PRESS. SEPTEMBER 28, 2017. Canada vs. Boeing: How the fight with the aerospace giant began
NATHAN DENETTE
ALEXANDER PANETTA, WASHINGTON

An awkward encounter above Washington's Pennsylvania Avenue last spring provided early evidence of a rift between the Canadian government and the world's largest aerospace company.

Representatives of the Boeing Co., wound up hastily leaving a meeting at Canada's embassy after a tense conversation with the ambassador.

They had arrived to discuss business with the Canadian government. The giant plane-maker has been hoping to add a multibillion-dollar fighter-jet sale to its more than $94-billion (U.S.) in annual revenues.

But it so happened this visit fell on the same day Boeing filed a trade action against Canada's largest aerospace player, the far smaller Bombardier. It also happened that the Canadian hosts were given little warning.

Word filtered up to the top-floor office of ambassador David MacNaughton about an hour beforehand about the trade action, which this week resulted in whopping 220-per-cent preliminary duties on Bombardier sales.

"(MacNaughton) called them out of the meeting," one source said.

Two sources say the ambassador delivered a message similar to what's now the Canadian government's public mantra: "I don't do business with people suing me," and, "You shouldn't treat customers this way."

The Boeing people decided it was better to leave. The meeting was over.

What the Canadian government has heard from Boeing is that the company is torn between two imperatives: completing the military sale with Canada and avoiding what it perceives to be a colossal mistake of its past.

The company has said this publicly.

In an interview with The Canadian Press, Marc Allen, president of Boeing's international division, said: "We watched another competitor come up and enter the market in a very similar fashion."

That competitor was Airbus, in the 1970s.

A consortium of French, German, and U.K. interests, Airbus started small in the U.S. market, with European subsidies propping up its twin-engine and single-aisle planes. But the product lines, and the planes, grew, and by the 1990s the company had become a U.S. giant in its own right, muscling aside smaller players like McDonnell Douglas.

Now Airbus is aiming for 50 per cent of the American market after opening its first jetliner plant in the U.S.

Boeing claims to fear a repeat. After Bombardier's sale of 75 mid-sized planes to Delta Air Lines, it launched a complaint based on Bombardier's various forms of assistance from Canadian and Quebec taxpayers.

Never mind that Boeing is by far the No. 1 recipient of U.S. government subsidies. It drew $14.4-billion in various forms of assistance since the 1990s according to the website Subsidy Tracker, far more than any other U.S. company and far more than what Bombardier received. The U.S. Export-Import bank is jokingly referred to in Washington as, "the Bank of Boeing."

And Boeing doesn't even make planes similar to those Bombardier sold Delta. One Washington critic, Dan Ikenson of the free-market Cato Institute, compares this to a snowplow maker suing a bicycle company.

What matters is a smaller rival can grow, Boeing says.

It repeated that cautionary tale of Airbus several times during a day-long hearing before the U.S. International Trade Commission.

"Airbus in 40 years has an airplane now in every single market segment," said Raymond Conner, Boeing's vice-chairman.

"What Airbus did is they entered ... the smaller (plane market)... and then moved on from there... Today we are fighting for our lives to maintain upper 40's or 50 per cent (market share). The impact is real and it sometimes takes many years to materialize.

"What (Airbus has) done in 40 years, we had to do in 100."

Washington aeronautics consultant Richard Aboulafia says Boeing is making a grave error. It is antagonizing governments and companies in several countries, including the U.K., where Bombardier has more than 3,000 employees, and angering big U.S. buyer Delta.

That's not all.

He says it's harming itself in two other ways: jeopardizing future military contracts in those countries and stoking protectionist sentiment in an industry that relies on international trade.

And Boeing might find out its efforts pointless in the end as the Department of Commerce duty could be overturned by the more historically neutral ITC, or by the U.S. domestic trade court, or other international panels.

"People said the entire Vietnam War was the triumph of tactics over strategy," Aboulafia said.

"You could win a battle and then find yourself having outraged (everyone)... Can (Boeing make) an effective trade complaint? Yeah, probably. What are the second-order effects? Oh my dear God, that's a strategic question. (They'd) rather not think strategically."

He heaps scorn on the idea that this is the ghost of Airbus, stirring again.

Aboulafia said it's not the 1970s. The planes are different, the market is different and Canada's subsidies to Bombardier are nowhere close to as threatening as an international consortium being propped up by different countries.

Of the attempt to draw parallels, he says: "That's what you'd think if you had no sense of strategic history."

BOMBARDIER. REUTERS. SEPTEMBER 27, 2017. Bombardier overshadows NAFTA talks as Quebec, Britain threaten retaliation
Allison Lampert
Amanda Ferguson

MONTREAL/BELFAST (Reuters) - Stiff U.S. duties imposed on Bombardier Inc’s (BBDb.TO) CSeries jet sparked retaliation threats from Britain and Canada’s Quebec province on Wednesday as the dispute, which may affect thousands of jobs, overshadowed North American trade talks.

The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties of 220 percent on the jets, which could effectively shut Bombardier out of the U.S. market if upheld, after rival Boeing Co (BA.N) launched a trade challenge accusing Canada of unfairly subsidizing the aircraft.

The topic loomed large at North American Free Trade Agreement (NAFTA) talks in Ottawa where the countries acknowledged relations between Washington and Ottawa had become strained over the U.S. action.

Canadian Foreign Minister Chrystia Freeland said she raised the issue with U.S. Trade Representative Robert Lighthizer. He told reporters: “I‘m not saying it doesn’t have an effect on relationships - it does - but not on this negotiation.”

The duties, which came on the same day Bombardier was left out of a rail tie-up, sent its shares and bond prices lower. The shares initially fell 14 percent before regaining ground to end down 7.5 percent at C$2.10. Many of its junk-rated bonds also fell, according to MarketAxess data.

“This puts a cloud over the company with regard to the CSeries,” said Bryden Teich, portfolio manager at Avenue Investment Management. “As long as there’s this uncertainty, it will affect the share price.”

The duties create “a level playing field in the aerospace market,” said another rival, Brazil’s Embraer (EMBR3.SA), which welcomed the move.

Bombardier is a major employer in Quebec, where Prime Minister Justin Trudeau’s Liberals say they need to win extra seats in an election set for October 2019.

Quebec Premier Philippe Couillard called on Ottawa to ensure that “not a bolt, not a part, not a plane from Boeing” be allowed into Canada until the dispute had been resolved.

“Boeing may have won a battle but, let me tell you, the war is far from over. And we will win,” Couillard told reporters, describing the duties as an attack.

Boeing, in a statement, reiterated it was not attacking Canada and the issue was a commercial dispute with Bombardier.

In Ottawa, Trudeau said the government was “disappointed and ... will continue to fight for good Canadian jobs.” He has previously said Canada will not go ahead with plans to buy 18 Boeing F-18 Super Hornet fighter jets unless the challenge is dropped.

Canadian Trade Minister Francois-Philippe Champagne described it as a deplorable decision and one which shows that Boeing is not a “trustworthy partner.”

“Our message to the Americans is to tell them that this decision will also have an impact on American suppliers and jobs in the United States,” he added.

BROADENING TRADE BATTLE

The Boeing-Bombardier spat has snowballed into a bigger trade battle. Bombardier is a major employer in Northern Ireland, where a handful of legislators is keeping British Prime Minister Theresa May’s minority Conservative government in power.

Britain told Boeing on Wednesday that it could lose out on British defense contracts because of the dispute. May said in a tweet that she was “bitterly disappointed” by the ruling.

Boeing said it was committed to Britain.

The duties on Bombardier mark the second U.S. trade action against Canadian companies since President Donald Trump took office. Earlier this year, the United States imposed preliminary anti-subsidy duties on Canadian softwood lumber.

Boeing launched its challenge in April, alleging Bombardier had dumped airliners on the U.S. market when it struck a deal for 75 CSeries planes with Delta Air Lines Inc (DAL.N).

Delta’s CEO on Wednesday said Boeing’s challenge was “absurd” and predicted the duties would not be made permanent when Commerce reaches a final decision next year.

Bombardier, which considered bankruptcy in 2015 and is undertaking a five-year plan to improve performance and margins, is still grappling with nearly $9 billion in debt.

The company also got snubbed by Siemens AG (SIEGn.DE) on Tuesday, which opted to merge with France’s Alstom instead.

Bombardier may need to raise more equity to support a capital-intensive business, according to Lorne Steinberg, president of Lorne Steinberg Wealth Management Inc in Montreal.

Writing by David Ljunggren; Additional reporting by Anna Mehler Paperny and Nichola Saminather in Toronto and Leah Schnurr in Ottawa; Editing by Meredith Mazzilli and Matthew Lewis

BOMBARDIER. BLOOMBERG. 28 September 2017. May Says Boeing Undermining Ties With U.K. Over Bombardier
By Thomas Penny

• ‘Not the kind of behavior we expect from a long-term partner’
• U.K. prime minister comments after speech at Bank of England

Prime Minister Theresa May hinted that Boeing Co. risks future contracts with the U.K. if it continues to press its case against Bombardier Inc., which employs more than 4,000 people in Northern Ireland.

Speaking after a preliminary U.S. Department of Commerce ruling placed punitive import duties on Bombardier aircraft after a dispute over state subsidies, May said she is working with the Canadian government and leaders from across the political divide in Northern Ireland for a solution.

“We have a long-term partnership with Boeing, in various aspects of government, and this is not the kind of behavior we expect from a long-term partner and it undermines that partnership,” May said after a speech at the Bank of England in London on Thursday. Her focus is on “how we can work together to impress on the American government the importance of Bombardier to Northern Ireland.”

May’s intervention echoes comments by Defence Secretary Michael Fallon and reflects growing frustration in government over the failure to broker a solution.

High Impact

The dispute is potentially highly damaging to May, who relies on the support of 10 lawmakers from Northern Ireland to keep her Conservatives in power. And the fact that her lobbying of Donald Trump brought no obvious results has raised questions about the post-Brexit free-trade deal with the U.S. that both countries say they are keen to secure.

“A prime minister betting our economic future on a deregulated trade deal with the U.S. might want to explain how 220 percent tariffs are going to boost our exports,” opposition Labour Party leader Jeremy Corbyn said in a speech on Wednesday. “If the special relationship means anything, it must mean that we can say to Washington: that way is the wrong way.”

While Bombardier employs 4,000 in one of the most politically sensitive parts of the U.K., a conflict with Boeing also risks jobs.

The Chicago-based company, which sells Apache attack helicopters, Chinook transports and surveillance planes to the British military, supports more than 18,700 jobs either directly or though its supply chain, it said in a statement posted on its website. The company also "broke ground" this month for a factory in Sheffield, northern England, its first in Europe.

Protectionism Alert

In her speech at the U.K. central bank, May mounted a staunch defense of free markets and later warned of “aspects of protectionism creeping in around the world.”

“I want the U.K. to be a global champion of free trade, because I think those of us who believe in free trade need to stand up, not just explain its wider benefits, but help to explain its benefits to individuals,” she said.

Bombardier is the largest manufacturing employer in Northern Ireland, the poorest of the U.K. regions. The province has struggled to grow its economy after decades of sectarian conflict and it continues to be plagued by political difficulties.

At over 5 percent, unemployment in Northern Ireland is well above that of the U.K. as a whole and gross value added per head is almost 30 percent below the national average.

TRANSPORTATION

BOMBARDIER. The Globe and Mail. Bloomberg. 28 Sep 2017. Alstom and Siemens put feud in the past. Merger marks the end of a decades-long rivalry that came to a head in 2011 over high-speed-rail safety
CHRISTOPHER JASPER

Alstom SA’s merger with the train-making arm of Siemens AG will mark the end of a bitter rivalry as the European rail industry’s biggest adversaries unite in an effort to fend off the challenge from China and Japan.
The ill-tempered contest between Alstom and Siemens has been a feature of the sector for decades and reached boiling point in 2011, when the pair engaged in a public spat over the safety of competing highspeed models they were pitching to Channel Tunnel express operator Eurostar International Ltd.
Now, the French and German companies are set to join forces in a business with €15-billion ($22-billion) in combined sales as they seek to halt the advance of Asian giants including Beijing-based CRRC Corp. and Hitachi Ltd. of Japan. That seemed a very distant prospect at the height of the confrontation over the €600-million Channel Tunnel tender.
As the supplier of Eurostar’s original fleet, Alstom had seemed to be in prime position to win the order with a modified version of its iconic TGV. Instead, the deal went to the Siemens Velaro e320, prompting the French company to suggest that the multiple engines powering the German train would pose a serious fire risk in the confines of the 48-kilometre undersea tunnel.
Siemens emerged victorious after France accepted a ruling from the European Union’s rail safety body saying the Velaro presented no more of a danger than the TGV. The defeat in its home country came as a body blow to Alstom, which had been regarded as rail royalty since the original Train à Grande Vitesse (TGV) snatched the world speed record from the Japanese Shinkansen in the 1980s.
While the TGV was still the fastest railed vehicle after a 574.9-kilometres-an-hour run in 2007, the loss confirmed the pressure facing Alstom not just in the shape of Siemens but also from increasingly export-oriented Asian manufacturers and Canada’s Bombardier Inc., which had become the largest Western train maker following the 2001 purchase of Daimler AG’s Germany-based Adtranz arm.
The critical move in propelling Alstom toward a tie-up with Siemens came with the sale of the French group’s power-generation business to General Electric Co. in 2015, according to Maria Leenen, chief executive officer of German rail consultancy SCI Verkehr. While the French company gained GE’s signalling unit, giving it critical mass in one of the most profitable areas of rail technology, the transaction ultimately left it without the heft to fund expensive new train and engineering projects, Ms. Leenan told Bloomberg.
Although Alstom is of a similar size to the rail division of Munich-based Siemens, with annual sales of more than €7-billion, the German business is part of a group that ranks as Europe’s largest manufacturer with almost €80-billion in revenue and a product range spanning power grids and building controls to medical scanners, washing machines and wind turbines.
Yet Siemens, too, had seen the writing on the wall as overcapacity in Europe ate into rail margins, accentuated by the entry of Shinkansen partner Hitachi, which established its global headquarters and a major factory in Britian after winning a £5.7-billion ($9.5-billion) express-train contract there. The Tokyo-based group followed up by purchasing the signalling business of Italy’s Finmeccanica SpA in its largest overseas deal on record.
All the while, European train makers were facing growing competition from China, where train output began to eclipse Bombardier, Alstom and Siemens from 2011. The threat was ratcheted up in 2015, when a government-led merger of China CNR Corp. and CSR Corp. – formerly competing groups based in the north and south of the country – created a new global No. 1 in CRRC.
The Chinese giant has yet to penetrate the most lucrative Western markets, but already dominates sales to cost-sensitive economies in Africa, Eastern Europe, Latin America and Southeast Asia. CRRC can build a high-speed train for about €20-million, half the price of a European model.
Siemens had sought to head off the GE-Alstom deal in 2014 with a proposal that would have handed its rail operations to the French company in exchange for the power business.
The failed intervention created resentment between Siemens chief executive Joe Kaeser and his then-opposite number Patrick Kron, with the German company turning to Bombardier in its bid to stem the Asian tide through proposed joint ventures in train manufacturing and signalling. While that plan, which until this month seemed set to go ahead, would have helped to restructure rail capacity in Germany, it would have fallen short of creating a European champion capable of assuming a “quality-leadership role” in the global market, Ms. Leenen said.
The surprise Alstom transaction will do just that, although a test will come when the new company has to rationalize its lineup and production base for the next generation of rolling stock, she said. For now, the overlapping ranges of subway trains, streetcars and commuter and express models is likely to survive, with TGV and Velaro making the unlikeliest of stablemates.

BOMBARDIER. The Globe and Mail. 28 Sep 2017. Opinion. Bombardier’s rail loss boils down to geopolitics
ERIC REGULY, EUROPEAN BUREAU CHIEF

From page B1 Bombardier’s PR whizzes pulled the oldest trick in the book on Tuesday night, when they realized they had to say something, however bland, on the blockbuster merger of Alstom SA of France and the rail division of Germany’s Siemens AG, creating the world’s secondlargest train maker. They made a virtue of a necessity.
Bombardier Transportation (BT), the company’s largely European rail business, was in fine shape, merci beaucoup, and was happy to go it alone while industry giants were forming around it. “While we will always explore strategic options that may create value, we do not need to merge with another major player to maintain our leadership position in the rail business,” the company said in a statement.
Never mind that BT, for years, has been trying to do a deal with either Alstom or Siemens while the big Chinese train makers, now merged into a giant called CRRC, opted to make world domination their business strategy.
As late as this week, some key Bombardier investors were convinced that BT and Siemens could surprise the market with a merger proposal, even though the rumours suggested an Alstom-Siemens union was more likely. BT was still thought to be in the running because, in the summer, it was widely reported that BT and Siemens were on the verge of forming two joint ventures, one to pool their rolling-stock manufacturing, the other for their signalling businesses.
Why the joint venture idea was scrapped isn’t known, but here’s a guess: It was more to do with European geopolitics than figuring out whether the offices with the best executive toilets would go to the Canadians or the Germans.
While Europe is outward-looking on trade – note the recent launch of the Canada-Europe free-trade agreement, known as CETA – it is decidedly inwardlooking when it comes to building corporate champions. Putting a French and a German company together made patriotic sense; a Canadian and a German one far less so.
The European train business has always had nationalism in its DNA. Almost all of the biggest European countries had their own train-making businesses. As with the auto companies, they helped to revive Europe’s industrial base after the Second World War.
Trains required steel, which required steel mills. They required engineers, which required technical schools. They put a lot of semi-skilled and highly skilled people back to work after the war debris was swept away. Their workers were part of powerful unions.
Their trains became marks of national pride. To this day, the train à grande vitesse (TGV), the superfast train that was developed in the 1970s by GEC Alsthom (now Alstom), is a high-profile symbol of modern France and its razzle-dazzle transportation technology.
When BT threatened in 2011 to close its Derby factory in England, which was once the world’s biggest train-making site, the British government went into spasms of grief and duly found a fat contract to keep it alive. In the 21st century, trains matter as much as ever – maybe more so – as European governments try to keep their waning tech and industrial sectors from wholesale exodus to Asia.
An outright foreign takeover of the Alstom or Siemens trainmaking business was always unthinkable. It became even more unthinkable when Emmanuel Macron was elected French President in the spring. More so than Germany’s Angela Merkel or Italy’s Paolo Gentiloni, he is Mr. Europe and is calling for greater integration as he seeks to reinvent the stalled “European project.” Big European companies (read: Not American or Chinese) fit his style.
The rumours that Siemens and BT were on the verge of a jointventure deal would not have been lost on Mr. Macron and his ministers. The political capital they threw at the union of Alstom and Siemens may have been enough to convince Siemens to ditch the Canadians, though, in truth, putting Siemens and BT together would have been a logistical pain because of the extensive overlap in Germany – whose factories and workers would go to the butcher’s block?
BT is running out of options in Europe, especially since it wants to be a buyer, not a seller; the cash flow and profits from the train side are needed to prop up the ailing aerospace division, so the bigger BT becomes, the better.
Creating a “European” champion, in other words, will be hard as long as Bombardier, through BT, is doing the buying. BT will eventually get its prize – it has to, if it wants to compete on a global scale with the Chinese – but that prize may not be a big European train company. In the meantime, it, with a little help from its PR guys, will pretend not to worry as giants form around it.

BOMBARDIER. The Globe and Mail. 28 Sep 2017. There’s reason to chance it on Bombardier. While the company has suffered yet another blow in the form of punitive U.S. duties, its new C Series planes are being noticed

DAVID BERMAN

Beleaguered Bombardier Inc. investors are being tested again.
Following a preliminary ruling from the U.S. Commerce Department on Tuesday night, Bombardier now faces punitive countervailing duties on planes imported into the United States.
The shares fell right on cue, tumbling 7.5 per cent on Wednesday. They closed in Toronto at $2.10, down 17 cents.
But for investors who don’t mind taking a risk with an unpopular bet, there appears to be a good reason to side with Bombardier here: Its new C Series planes, apparently, are being noticed.
Bombardier’s stock had already been battered by cost overruns and production delays associated with the development of its C Series planes, the fuel-efficient line of regional jets that Bombardier finally began to deliver about a year ago.
The stock has also been weighed down by a long list of other concerns. There was the company’s request for government financial aid, the corruption investigation by Canadian and Swedish authorities, and the planned merger of Siemens AG and Alstom SA’s rail operations, which raises questions about Bombardier’s own rail division’s ability to compete.
Now, faced with punishing U.S. duties on the new planes, the pain might not be over.
This latest setback, which began when mighty Boeing Co. complained earlier this year that it believed Bombardier received unfair subsidies on the sale of some C Series planes, raises questions about Bombardier’s ability to make any progress on sales in the United States and elsewhere.
But Boeing’s complaint and the Commerce Department’s supportive ruling also suggests that the Canadian company has scored a significant victory with its new planes. Why else would Boeing even notice?
Let’s start with the reaction to the C Series planes: By most accounts, fliers and airlines like the alternative to similar-sized planes made by Boeing and Airbus (737s and A320s, respectively).
In an article about mid-sized jets published earlier this year, The Economist – a neutralenough source on this matter – said that airlines like the Bombardier planes because they are reliable and easy on fuel, while passengers appreciate the quiet and comfortable cabins. As well, the article suggests that Bombardier, despite costly production delays, is by no means behind rising competition from manufacturers outside the United States.
Sales of Russia’s Sukhoi Superjets are lagging sales of the C Series planes, and are mostly confined to airlines in Russia. And Brazil’s Embraer E2 planes aren’t expected to enter service until 2018 at the earliest. Same goes for China’s Comac planes.
Investors should also note that Bombardier’s delivery of C Series planes is accelerating. Bombardier management expects the company will deliver about 30 aircraft in fiscal 2017, up from just three deliveries in the first quarter.
Meanwhile, there are 360 orders, as of June 30, and this backlog is growing. Bombardier shares bounced 6.1 per cent on Tuesday, following a report that the company is in talks with China’s three largest airlines.
The success is starting to appear in some of Bombardier’s financial numbers (if you’re okay with numbers that are less concrete than, say, actual profit).
In its second-quarter results, released at the end of July, Bombardier reported an adjusted profit of 2 cents per share, its best quarterly showing in two years and well ahead of analysts’ estimates.
As well, margins are growing fatter in the transportation unit, which is leading to greater confidence in management’s full-year target for EBIT (or earnings before interest and taxes), a measure of profitability.
Does this add up to an obvious buying opportunity?
Umm, here’s where the risks kick in.
Bombardier hasn’t produced an annual profit since fiscal 2013. Without recent government financial help, the company may have failed.
And with respect to the Boeing complaint, it is unclear at this point the staying power of the Commerce Department’s preliminary ruling (a final ruling by the U.S. International Trade Commission is expected in 2018). The impact the ruling will have on U.S. C Series sales is also unclear.
But there’s a reason to take a chance on this stock after it’s been skewered: If Boeing sees the C Series planes as a competitive threat, then perhaps investors should do the same.
Bombardier (BBD.B) Close: $2.10, down 17¢

MERCOSUR

The Globe and Mail. Reuters. 28 Sep 2017. South America’s Mercosur mulls new trade deals abroad

The South American trade bloc Mercosur could seek trade deals with Canada, Australia and New Zealand this year, an Argentine official said on Wednesday, as largest members Brazil and Argentina seek to open their economies.
Mercosur, which also includes Uruguay and Paraguay, is working with the European Union to finalize the political framework for a trade deal this year, at a time when the United States under President Donald Trump has been shying away from trade.
“There is a possibility that Mercosur starts negotiations with Canada, Australia and New Zealand this year,” Argentine Commerce Secretary Miguel Braun said at the Thomson Reuters Economic and Business forum in Buenos Aires.
“Integrating ourselves with these countries takes us in the direction we want to go,” Mr. Braun said, pointing to developed economies with high salaries.
Argentina alone is seeking a trade agreement with Mexico, and Mr. Braun said it was also working on a trade agreement with Chile that would “deepen what we already have.”
Chilean President Michelle Bachelet said in New York last week that Santiago was finishing a trade liberalization agreement with Buenos Aires to boost trade and open opportunities for investors.

REUTERS. SEPTEMBER 27, 2017. Mercosur could seek trade deals with Canada, Australia, New Zealand

BUENOS AIRES (Reuters) - The South American trade bloc Mercosur could seek trade deals with Canada, Australia and New Zealand this year, an Argentine official said on Wednesday, as largest members Brazil and Argentina seek to open their economies.

Mercosur, which also includes Uruguay and Paraguay, is working with the European Union to finalize the political framework for a trade deal this year, at a time when the United States under Donald Trump has been shying away from trade.

“There is a possibility that Mercosur starts negotiations with Canada, Australia and New Zealand this year,” Argentine Commerce Secretary Miguel Braun said at the Thomson Reuters Economic and Business forum in Buenos Aires.

“Integrating ourselves with these countries takes us in the direction we want to go,” he said, pointing to developed economies with high salaries.

Argentina alone is seeking a trade agreement with Mexico, and the foreign ministry said later on Wednesday that it had finalized a trade deal with neighboring Chile.

The ministry’s statement noted that the agreement would touch on regulations surrounding investments, services, public purchases, telecommunications and e-commerce. The agreement will be officially signed in October after a legal review.

Braun said that the deal with Chile would “deepen what we already have.”

Chilean President Michelle Bachelet said in New York last week that the agreement would boost trade and open opportunities for investors.

Reporting by Caroline Stauffer; Additional reporting by Dion Rabouin in New York and Luc Cohen in Santiago; Editing by Sandra Maler

INTERNATIONAL TRADE

EDC. SEPTEMBER 28, 2017. WEEKLY COMMENT. The Sleeping Giant Stirs…
By Peter G. Hall, Vice President and Chief Economist

Big commitments are hard to make. Before putting substantial funding toward any business project, there has to be a solid case for it. At a very basic level, it helps when the economy is strong. When the political situation is stable. When there is good access to international demand. And, of course, when current facilities just aren’t sufficient to process current orders . The absence of these factors, or greater uncertainty shrouding them, has held back corporations the world over from making big commitments – for seven long years. More recently, on certain fronts the case has begun to improve. Is the sleeping giant starting to stir?

Before answering the question, some might doubt its premise. Giant? Gross investment in the economy? Add up its four big components – residential, non-residential, machinery and equipment and government investment – and you barely get 20 per cent of the economy. Certainly not the ‘giant’ status of consumer spending, at about 60 per cent of GDP, and international trade which, when both exports and imports are included, is also about 60 per cent of the economy. In aggregate, investment looks a lot more like a David than a Goliath.

Maybe so, but as the story goes, David proved to be the greater giant. Investment may be a bit of a sleeper in the economy, but don’t let its size fool you – it is actually the element that to a large extent determines the economy’s capacity to produce future goods and services. Take away its oomph, and it says a lot about where the economy is going. In the post-recession years, the oomph has clearly been absent. Globally, this investment cycle hasn’t been shorter in duration than most, but it has clearly been the least impressive in decades. Average growth has been almost a full percentage point below the next-to-worst growth period since 1980. In the OECD alone, make that since 1960. Through 2016, this giant has stayed pretty sleepy.

No less so than other elements of GDP, you might say. Sure, investment’s share of global GDP hasn’t really changed in recent years. Ah, but it has in the OECD, where the post-recession investment gap is as big now as it was in 2010. And what set emerging markets apart was massive government investment; the private sector is still dealing with a deficit.

Is there any reason to believe that the next few years will be any different? A recent Commentary suggested the first glimmers of a renewed investment cycle, in the machinery space. What about construction? Ask ‘new normal’ analysts, and they’d say there’s no hint of a change. The data seem to be on their side. But consider these factors: first, recent weakness followed the 18-month commodity price plunge that ended in early 2016. Since then, a partial revival has done the same for investment plans. As a whole, the worst seems over for the mining sector, and investments can again be considered.

A second factor is the industrial space. It was plagued by chronic over-capacity in the immediate post-recession years, but that has steadily been used up since. Now, OECD markets are looking at utilization rates that are as tight as they have been since 2008. Vacancy rates for industrial space in the US are in the low single digits in a number of cities, and in a number of cases are about as low as they ever get. Without some kind of uptick in investment, firms are soon going to have to turn away business, and jack up the prices of the limited amount of stuff they are making. Central banks see this, and in anticipation are tightening monetary conditions again.

A third factor is commercial office space. Demand for the services that these glass-and-steel structures produce is heating up, and vacancy rates seem to be getting a lot lower. While there is still room to grow, the effect of rising pressures on average rents is likely to get the sector more interested than it has been for some time in new projects.

The same trends are generally true for business investment in Canada. As things begin to heat up globally, demand is expected to be tighter in Canada’s export sector. Key manufacturers are already bumping into capacity issues.

The bottom line? There’s little concrete evidence of a significant global upshift in investment. But there is a considerable increase in trusted preconditions. One final thought: political uncertainty has created a higher-than normal first-mover advantage.

Global Affairs Canada. September 28, 2017. Minister of International Trade to discuss imperative and advantages of market diversification at Montreal Council on Foreign Relations

Ottawa, Ontario - Canadians count on the Government of Canada to create employment, ensure economic growth and strengthen the middle class. Growing Canada’s trade and investment relationship with new and rapidly growing markets is one of the main ways to achieve this goal and is, therefore, a top priority for the Government of Canada.

This global approach to trade will help create more opportunities for Canadian businesses to grow and to thrive abroad, which will create more good-paying jobs for middle-class Canadians.

On September 29, 2017, the Honourable Francois-Philippe Champagne, Minister of International Trade, will be in Montréal, Quebec, to give a speech at the Montreal Council on Foreign Relations (CORIM) about the imperative and advantages of trade diversification. The Minister will highlight recent accomplishments under Canada’s ambitious and progressive trade agenda and discuss upcoming priorities.

Minister Champagne’s participation at CORIM will give him the opportunity to engage with business and community leaders from Quebec on how small and medium-sized enterprises may benefit from the recently launched and provisional application of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). He will also highlight the Government of Canada’s aim to increase access beyond traditional markets to emerging markets, such as the Asia-Pacific and Latin America regions, and how Canadians will be able to seize the new economic opportunities these important markets offer Canadian entrepreneurs, business owners and workers alike.

Quotes

“Canada is a trading nation, and Canadians know that our prosperity depends on our links with the global economy. Opening new markets for Canadian exporters is key to Canada’s efforts to create jobs, grow the economy and strengthen the middle class. With the enormous opportunities that exist right now, from the European market to Asia-Pacific to Latin America, there has never been a better time for Canada to diversify its trade. Our government is committed to ensure that we are seizing these occasions and creating more opportunities for businesses to expand and diversify with confidence.”

- François-Philippe Champagne, Minister of International Trade

Quick facts

• On September 21, 2017, with the launch of CETA provisional application, 98% of Canadian and EU tariff lines became duty-free.
• In June 2017, Canada was officially invited to start free trade negotiations on the process of becoming an associated state of the Pacific Alliance, a regional integration initiative founded in 2011 by Chile, Colombia, Mexico and Peru.
• In September 2017, the 10 economies that comprise the Association of Southeast Asian Nations (ASEAN) agreed to launch exploratory discussions to determine the potential for a Canada-ASEAN free trade agreement.
• Canada is engaged in exploratory discussions with China about a possible free trade agreement and has consulted Canadians on their views on this initiative.
• Associated links

• CETA: Tariffs plummet to zero today as Canada-European Union deal gets under way: https://www.canada.ca/en/global-affairs/news/2017/09/ceta_tariffs_plummettozerotodayascanada-europeanuniondealgetsund.html
• Canada takes another strategic step in the Asia-Pacific region: https://www.canada.ca/en/global-affairs/news/2017/09/canada_takes_anotherstrategicstepintheasia-pacificregionexplorat.html
• International Trade Minister concludes successful promotion of Canada’s forest industry during trade mission to China: https://www.canada.ca/en/global-affairs/news/2017/04/international_tradeministerconcludessuccessfulpromotionofcanadas.html
• International Trade Minister welcomes invitation by the Pacific Alliance to start negotiations to deepen trading relations with Latin America: https://www.canada.ca/en/global-affairs/news/2017/06/international_tradeministerwelcomesinvitationbythepacificallianc.html
• The Canadian Trade Commissioner Service: http://tradecommissioner.gc.ca/index.aspx?lang=eng

TOURISM

StatCan. 2017-09-28. National tourism indicators, second quarter 2017

Tourism spending in Canada: $21.6 billion
Second quarter 2017: 1.7% increase (quarterly change)
Source(s): CANSIM table 387-0001.

Tourism spending in Canada rose 1.7% in the second quarter, following a 1.1% gain in the first quarter. Increased tourism spending by Canadians at home and by international visitors in Canada contributed to the second quarter increase.

Chart 1   Chart 1: Tourism spending in Canada increases

Tourism spending in Canada increases

Tourism spending by Canadians increases

Tourism spending by Canadians in Canada grew 2.1% in the second quarter, compared with a 0.8% increase in the previous quarter.

Growth was driven by increased expenditures on passenger air transport (+3.1%). Non-tourism goods and services (+2.4%) (such as groceries and clothing), pre-trip expenditures (+5.1%) (such as luggage and camping equipment), and spending on vehicle fuel (+1.8%) also increased.

Spending on interurban bus transport (-3.1%) and recreation and entertainment (-1.4%) both fell in the second quarter.

Chart 2   Chart 2: Tourism spending by Canadians at home increases

Tourism spending by Canadians at home increases

Tourism spending by international visitors edges up

Spending by international visitors in Canada edged up 0.2% in the second quarter, compared with a 2.1% gain in the first quarter.

Higher outlays on passenger air transport (+0.6%) accounted for most of the growth. Spending on non-tourism products (+0.4%) and food and beverage services (+0.3%) also increased.

Visitors spent less on interurban bus transport (-2.0%) and recreation and entertainment (-0.2%).

Chart 3   Chart 3: Increase in tourism spending by international visitors

Increase in tourism spending by international visitors

Tourism gross domestic product outpaces total economy

Tourism gross domestic product (GDP) grew 1.6% in the second quarter, a faster rate than that of economy-wide GDP (+1.2%). Tourism GDP has outpaced national GDP in 12 of the last 15 quarters.

The growth in tourism GDP was driven mainly by gains in transportation (+2.8%) and in non-tourism industries (+1.7%). The GDP of other tourism industries edged down 0.1%.

Tourism employment rose 1.2% in the second quarter, following growth of 0.2% in the previous quarter. Food and beverage services (+0.9%), air transportation (+3.6%) and accommodation services (+0.6%) all contributed to growth. Tourism jobs in non-tourism industries (+1.8%) also contributed to the increase, while employment in recreation and entertainment fell 0.4%.

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/170928/dq170928b-eng.pdf

AGRICULTURE

StatCan. 2017-09-28. Poultry and egg statistics, July 2017

Egg production rose 4.1% from July 2016 to 64.8 million dozen in July.

Placements of hatchery chicks on farms increased 5.5% from August 2016 to 67.6 million birds in August.

Stocks of frozen poultry meat in cold storage decreased 4.4% from September 1, 2016, to 93 340 tonnes on September 1, 2017.

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/170928/dq170928f-eng.pdf

FINANCE - TAX SYSTEM

Department of Finance Canada. September 28, 2017. Minister Morneau Discusses Tax Fairness With Standing Committee on Finance

Ottawa, Ontario – The Government of Canada is committed to changing a tax system where wealthy and high income individuals can use their corporations to pay lower rates of taxation than hard-working middle class Canadians, and is listening to small business owners, professionals and experts to ensure a fair approach.

Finance Minister Bill Morneau met today with members of the House of Commons Standing Committee on Finance about the Government's ongoing consultations on tax advantages involving Canadian-controlled private corporations. Minister Morneau encouraged a fact-based discussion on the Government's proposals and on the importance of levelling the playing field for the middle class by keeping high income and wealthy individuals from using private corporations to pay lower tax rates than middle class Canadians earning much less per year.

The Government is ensuring that the hard work of small business owners is rewarded by maintaining the lowest small business tax rate in the G7. With a combined general corporate tax rate that is 12 percentage points lower than our largest trading partner, the United States, the Government is helping businesses small and large to expand and create jobs. These rates are designed to help Canadian businesses create middle class jobs, invest in their community and grow—and the Government wants to make sure they are being used fairly.

Quote

"As the economy grows, Canadians need and deserve to know that their tax system is fair. Currently, we have a tax system that encourages the wealthy to incorporate to get tax advantages over the middle class. We don't think that's fair. We will listen to Canadians to ensure we get it right as we take the next step in our plan to grow the economy in a way that works for the middle class. That's why Small Business and Tourism Minister Bardish Chagger, my new Parliamentary Secretary Joël Lightbound, and I are visiting small business owners, professionals, and farmers and fishers across the country, listening to ideas and answering questions."

- Bill Morneau, Minister of Finance

Quick Facts

• An increasing number of Canadians—often high income individuals—are using private corporations in ways that allow them to reduce their personal taxes. In some cases, someone earning $300,000 with a spouse and two adult children can use a private corporation to get tax savings that amount to roughly what the average Canadian earns in a year.
• The Government of Canada is consulting Canadians on proposals to ensure equity in Canada's tax system while maintaining Canada's low and competitive business tax rates. According to the Coalition for Small Business Tax Fairness, two thirds of businesses in Canada earn less than $73,000 a year.  These hard-working middle class small businesses are not our focus.
• Canada has a combined general corporate tax rate that is 12 percentage points lower than our largest trading partner, the United States.
• Small businesses in Canada benefit from support that includes a reduced federal income tax rate of 10.5 per cent on their first $500,000 of active business income.
• The combined federal-provincial-territorial average tax rate for small business is 14.4 per cent, the lowest in the G7 and fourth lowest among Organisation for Economic Co-operation and Development countries. Small businesses can retain more of their earnings to reinvest, supporting growth and job creation.
• In addition to generous tax support, small businesses also benefit from direct program support for scaling up, including access to financing and foreign markets, support for innovation, and services to build entrepreneurial and management capacity through programs such as the Industrial Research Assistance Program and the Canada Small Business Financing Program. A number of federal entities provide support for small and medium-sized enterprises including Innovation, Science and Economic Development Canada, Global Affairs Canada's Trade Commissioner Service, Export Development Canada, and the regional development agencies. Most notably, the Business Development Bank of Canada serves 49,000 Canadian small and medium-sized enterprises and has reached a total of over $29 billion committed to small and medium-sized businesses. 

________________

LGCJ.: