A U.S. Navy Boeing P-8A Poseidon maritime patrol aircraft flies in a photo taken on Sept. 23, 2017.Darrin Zammit Lupi/Reuters
Boeing Co. BA-N will spend $240-million on initiatives to bolster Quebec aerospace innovation, as the U.S. industrial giant makes good on local investment commitments after winning a sole-source contract from the Canadian government for military surveillance planes last fall.
The jet maker said Tuesday it has earmarked $110-million for a new aerospace centre in the Montreal area. The site is expected to conduct research and development in collaboration with local companies and academic institutions.
Boeing said it will also invest $95-million to help subsidiary Wisk Aero, which already has an engineering hub in Montreal, develop its electric air taxis. Finally, it is pledging $35-million to help local landing-gear maker Héroux-Devtek Inc. advance its product research.
The federal government announced last November it would spend $10.4-billion on a new fleet of Boeing maritime patrol aircraft, a sole-source purchase that will replace Canada’s aging surveillance planes amid rising threats, including in the Arctic. Despite opposition from Canadian manufacturer Bombardier Inc. BBD-B-T, which called for an open competition, the government signed on for 14 Boeing P-8A Poseidon aircraft, with an option for two more. The first deliveries are expected in 2026.
Federal officials said at the time that Boeing had committed to investing an equivalent of $5.4-billion in Canada over 10 years, part of an “industrial and technological benefits commitment” to the country tied to winning the military deal. Canadian suppliers for the Poseidon aircraft include GE Aviation Canada and CAE Inc.
Boeing’s news Tuesday dovetailed with an announcement by the Quebec government that it is creating a new economic innovation zone for the aerospace industry located in the Montreal area. It’s the fourth such zone in the province after the “energy transition valley” that stretches from Bécancour to Shawinigan, Sherbrooke’s quantum-science focus and Bromont’s intelligent electronic systems.
The idea behind the zones is to bring companies, economic organizations and researchers specialized in one sector together to work on projects that will drive exports and investment, and ultimately yield commercial sales.
Canada’s aerospace industry is largely anchored in greater Montreal, with several major manufacturers and suppliers present. They include jet makers Airbus SE and Bombardier, flight-simulator maker CAE Inc. and engine maker Pratt & Whitney Canada.
Bombardier and Boeing have a thorny recent history. In 2016, the two companies clashed in a high-profile trade dispute that pitted the United States against Canada. Boeing claimed Bombardier cheated U.S. trade rules by selling CSeries jets to Delta Air Lines Inc. at “absurdly low prices” while benefiting from unfair subsidies from the Canadian and Quebec governments.
The issue escalated when Ottawa threatened to scrap plans to buy 18 fighter jets from Boeing in retaliation. In the end, the U.S. International Trade Commission ruled against Boeing, and rival Airbus eventually took over the CSeries program.