Boeing announcements delayed

Lack of contracts for Quebec keeping regional benefits under wraps, sources say

Contrats fédéraux - F-35 - rejet du Québec

DANIEL LEBLANC - The Harper government is delaying the announcement of regional benefits flowing from the $3.4-billion purchase of C17 cargo planes because of concerns over the lack of contracts going to Quebec, government and industry sources said.
"Boeing would be ready to go with a series of supplier announcements," a source said, adding the announcements are delayed because all of the planned contracts in Quebec "are not in place yet."
In February, when Ottawa announced the purchase of the four giant aircraft for the military, Industry Minister Maxime Bernier vowed that "Boeing will announce finalized contracts in the coming weeks."
Six months later, the first Boeing C17 is scheduled to land in Canada this weekend, at the air show in Abbotsford, B.C., and then at CFB Trenton in Ontario. The regional benefits, meanwhile, remain unannounced.
A spokeswoman for Mr. Bernier said the government's goal is to foster lasting relationships between Boeing and its Canadian partners.
"We want the best announcements possible," said Isabelle Fontaine, Mr. Bernier's director of communications. "There are very interesting things that are being prepared. When we make the announcements, we would like everyone to be happy."
As part of its delivery of U.S.-built C17 aircraft, the Boeing Co. has promised to spend the equivalent amount of the purchase price in Canadian regional benefits.
The situation has been creating headaches for the Harper government because of an intense lobbying campaign in Quebec. The province houses more than half of the country's aerospace industry, and expects a similar share of the regional benefits from the purchase of the C17s and other coming pieces of military hardware.
Boeing, however, has pre-existing relationships with a number of companies outside of Quebec and, for business reasons, does not want to send massive contracts to some of its big competitors in Quebec.
Prime Minister Stephen Harper put his foot down earlier this year and stated that Boeing can decide where to send its benefits.
"This government and our ministers have no intention of interfering in the regional distribution of the contracts," Mr. Harper told reporters in January. "It depends on the company that has the contract and its relations with other industry players."
Sources say that despite Mr. Harper's statement, the Quebec issue continues to hound the announcement of the regional benefits. Before the government officially announces the regional distribution of the benefits, sources said that Boeing has been pushed to finalize more contracts in Quebec to increase the province's share.
According to numbers obtained by The Globe and Mail, Boeing has provided the federal government with a regional-benefit plan worth about $1-billion in contracts, with the rest to come later.
Boeing promised to send $400-million in contracts to the West, $200-million in Ontario, $320-million to Quebec, and the rest to be spent in the Maritimes or in more than one province at once.
An official close to Boeing referred questions on the matter to the government, stating that "we are waiting for further direction from Industry Canada."
Mr. Bernier, whose department oversees the regional benefits, has publicly resisted the push for a specific target for Quebec contracts or for a larger share of contracts in his home province.
"The current government is being asked to engage in patronage and to dictate to the contract winner where the contracts should go. We are not in politics to interfere in private contracts. I assure you that all the Canadian companies will benefit from these military contracts," Mr. Bernier said in January in the House in answer to opposition questions.

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