The federal government and industry minister Brian Tobin thought they were delivering a tough message to trade competitors last week by promising to match Brazilian aerospace subsidies dollar for dollar to help Bombardier Inc. win an airplane contract.
Instead, they were waving a red flag in front of a frustrated agriculture community accustomed to hearing agriculture minister Lyle Vanclief insist that Canada cannot afford to match foreign subsidies.
By week’s end, Vanclief was facing demands that he be as aggressive as Tobin.
“The situations of Bombardier and the Canadian grain and oilseed industry are similar,” Agricore president Neil Silver wrote prime minister Jean Chrétien Jan. 12.
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“Both industries are unable to compete with subsidized products from major competitors and both have lost sales opportunities.”
He said Canadian farmers do not begrudge Bombardier its subsidy, but “we must point out that both the importance of the industry to the economy and the magnitude of the injury is much greater for grains and oilseeds.”
In Toronto, Ontario Federation of Agriculture president Jack Wilkinson joined the chorus.
“Now that the federal government has moved to recognize the damage foreign subsidies can do to Canadian producers, it’s time for agriculture’s needs to be met,” he said.
The political critics joined in as Canadian Alliance MP Howard Hilstrom pronounced himself “disgusted by the Liberal double standard” of helping corporate friends while ignoring farmers.
The kerfuffle began innocently enough when Tobin called a news conference Jan. 10 to say that since Brazil will not obey a World Trade Organization ruling against subsidies offered to its aerospace industry, Canada would match them.
At stake was an attempt by Montreal-based mega-corporation Bombardier to win a contract to build up to 150 jets for a Wisconsin company.
Ottawa will guarantee low-interest loans of up to $1.5 billion or more to the potential buyer.
It took just a few hours for agricultural groups to argue that the government had a double standard. If Brazilian subsidies could be matched, why not American agriculture subsidies?
Even Ontario Liberal MPP and opposition agriculture critic Steve Peters called on his federal Liberal cousins to be as generous with farmers as they had been with Bombardier.
The uproar caught up to Vanclief as he was in Europe asking the European Union to decrease its subsidies.
On Jan. 11, reporters wanted to know if Tobin’s decision did not set a precedent. Political opponents will ask the same when he returns home in late January.
In a telephone news conference from Belgium, Vanclief said Brazil’s subsidies had been ruled illegal while American and EU subsidies are within the rules. He said Ottawa has made special deals to help farmers, including money a year ago for Saskatchewan and Manitoba.
“Governments have obligations and responsibilities to many sectors, to all sectors,” he said.
Still, while defending the government he sounded almost sympathetic to the farmer questions.
“When governments help someone in one area, in one sector, certainly people in another sector take a look at that,” he said. “I don’t question that.”
