Pratt & Whitney deal the latest example of Ottawa's R&D focus
Jet engine maker has received government support in the past. But is it worthwhile for taxpayers?
Today's first order of business: Ottawa invests millions in Canada's aerospace industry. The target, an engine made by global aerospace giant Pratt & Whitney, intended for Bombardier's long awaited CSeries jet.
Bombardier is no stranger to Canadian government support, and investment in R&D to support high tech jobs is surely a political winner. But since Canadian business investment in R&D has been steadily declining for decades, we have to wonder, does the government know something business doesn't? And, as it picks a winner in this case, need it be a U.S.-based multibillion-dollar enterprise?
— Amanda Lang
Here's a closer look at the federal government's bet on aerospace.
Pratt & Whitney will invest a billion dollars in research and development over the next 4.5 years at its plants in Mississauga, Ontario and Longueuil, Que. That includes a $300-million contribution from Ottawa, which the government describes as "repayable."
The Minister of Industry James Moore announced the money will "support nearly 1,500 jobs" directly, and benefit Canada's aerospace industry. Pratt & Whitney is developing new engines, which will be used in Bombardier's upcoming CSeries aircraft.
This is far from the first time Pratt & Whitney has gotten a hand from Canada. According to the Fraser Institute, the U.S. firm has received $3.3 billion from Industry Canada since 1970, more than any other private corporation. That figure doesn't include today's investment.
Amanda Lang discussed the deal with Mark Milke, a senior fellow at the Fraser Institute, and author of the report on Industry Canada subsidies.