Quebec again writes down value of Airbus partnership

Quebec has booked another significant writedown on the value of its investment in a manufacturing partnership with Airbus SE EADSY for the A220 jet as the European plane giant races to make the aircraft program profitable by the end of next year.

Premier François Legault’s government has reduced by half the estimated value of its current stake in the A220 limited partnership with Airbus and now pegs it at US$300-million, officials with the province’s Economy Department confirmed Wednesday. The depreciation was recorded in the government’s financial statements for the fiscal year ending March 31.

Short-term returns on the A220 program have declined because of delays related to the aircraft’s supply chain, said Catherine Pelletier, spokeswoman for Economy Minister Christine Fréchette. She also cited the impact of U.S. import tariffs and the economic uncertainty they’ve created.

“We’re in a trade war. Unfortunately that’s not without consequence for our companies,” Ms. Pelletier said via e-mail. Radio-Canada first reported the writedown.

The A220, a single-aisle plane seating 100 to 150 people, is the former C Series airliner developed by Bombardier Inc. BBD-B-T at a cost of more than US$6-billion. It was the biggest research-and-development effort in Bombardier history, a nearly two-decades-long push funded in part by public money with the aim to put Bombardier at the cutting edge of global passenger-jet manufacturing.

The plane was two years late to market and US$2-billion over budget, and it nearly dragged Bombardier into ruin. After searching for a partner to help finance the venture, the Montreal-based plane maker turned to Airbus in 2018, handing over control for a nominal fee.

Quebec adds another US$300-million to joint Airbus manufacturing project

Quebec, which had invested US$1-billion in the plane program to help Bombardier avoid financial collapse, held a 16-per-cent stake when Airbus took control and later boosted its share to 25 per cent, while Airbus owns the other 75 per cent. The province has since written off the value of the initial US$1-billion investment.

In more recent years, the Legault government has twice poured more money into the venture to help bolster the production capacity at the A220 factory north of Montreal in Mirabel. It added US$300-million in early 2022 and another US$300-million in July, 2024.

At the time of the most recent investment, then-economy minister Pierre Fitzgibbon said the government was “very comfortable” that it would see a return while generating significant benefits for the economy as the A220 program matures. If the government had decided not to invest, its stake would have been diluted over time, he said.

Ms. Fréchette was forced to defend the government’s investment decisions again Wednesday, telling reporters in Quebec City that there are 3,900 well-paying jobs tied to the Airbus partnership. “It’s important that we keep our positioning in the sector,” she said.

The A220 program remains a money-losing proposition from a manufacturing perspective.

Airbus is aiming to boost A220 output to 14 units a month by the end of next year in order to achieve profitability and move through the learning curve that comes with building an all-new jet. The European plane maker has struggled with supplier and labour issues, blaming bottlenecks in airframe components, cabin materials and engines for the delays in getting aircraft out the hangar and into its customers’ hands.

The United States in May launched an investigation into imports of commercial aircraft, jet engines and other parts under Section 232 of the Trade Expansion Act, probing whether they pose a national-security threat. Any decision leading to new tariffs would hit Quebec, home to Airbus’s main A220 production plant, as well as a raft of other aerospace companies.