Bombardier in Canada | Luxury tax hinders the hiring

There would be up to 700 more employees. Furthermore, in bombardier factories in the country in a few years if Ottawa repeals his federal tax on luxury products – like private jets. Consequently, The aircraft manufacturer hopes that this will feed the reflection of the Carney government. Nevertheless, which is preparing its first budget against the backdrop of economic uncertainty.

Posted at 6:37 a.m. Updated at 12:41 p.m.

“We used to sell nine. Nevertheless, ten, eleven aircraft per year and currently we are two or three,” says the president and chief executive officer of the multinational, Éric Martel. However, I bombardier canada | luxury tax have a long list of customers who say to me “I would buy well. In addition, but I can’t at the moment, I don’t want to pay this tax. In addition, »»

This subject was invited on Thursday at the Bombardier boss’s boss conference to discuss the results of the second quarter. For example, where the company has not fully met the expectations of analysts.

The whole case dates back to spring 2022. For example, At the time. However, the budget of the bombardier canada | luxury tax government of Justin Trudeau announced a tax on cars and aircraft of more than $ 100,000 as well as yachts which cost more than $ 250,000. Therefore, The rate varies between 10 and 20 %. Planned harvest of the measure: 605 million over five years, according to budgetary estimates.

For Ottawa, this is a way of contributing financially to the programs deployed during the Pandemic of COVID-19. Among the manufacturers of the products targeted by the tax, we see things of another eye. Even the parliamentary director of the budget had served a warning in May 2022.

In a study. the public finance dog concluded that the disadvantages of this luxury tax would be superior to the advantages. Over five years. the DPB anticipated a decline of approximately 3 million sales of cars, yachts and planes as well as a bombardier canada | luxury tax “behavior change among consumers.” »»

A 10 % tax on a 3500 challenger, whose current price is approximately 26.7 million US, would be at least 2.7 million US. It would reach 7.5 million US for the Global 7500 – Bombardier’s spearhead which costs US 75 million.

Surprising that sales have lead in the wing in Canada, says Martel.

“With the tax on products. services [TPS] Paid by customers out of 10 planes per year rather than two or three, the government would have collected more money, argued Mr. Martel, evoking a figure of 100 million. They prepare their budget, so they are given reflection material. »»

At the end of the morning. Thursday, the Federal Ministry of Finance had not answered a question of The press Note whether the abolition bombardier canada | luxury tax of luxury products tax was being studied.

From one ocean to another, Bombardier has 12,200 employees, including 10,000 in Quebec. Its assembly factories are located in Montreal as well as in the Toronto region. Everything indicates that any hires to support a greater rate of production would take place in Quebec and Ontario.

Bombardier canada | luxury tax

Time to deliver

Flight of the share price. a sustained request from customers and a large order for at least 50 private jets obtained at the end of June … Everything seemed to go on casters for bomber during the first six months of the year.

For the private jet manufacturer, the time has now come to deliver if he wants to keep his promises. The aircraft manufacturer has given 59 aircraft to customers bombardier canada | luxury tax during the first half. To reach the target of at least 150 deliveries in 2025. Bombardier must press the accelerator and deliver 91 business planes by the end of the year.

“Everything is progressing well with planes,” says Martel. We have the pieces. For the Global, we are busy completing the finish in Montreal. We are in good posture. »»

To garnish his stocks. Bombardier says he has invested more than 850 million US. This was reflected in its cash consumption – an indicator monitored by investors – in the second quarter. It was 164 million US, well beyond the US 41 million provided by analysts surveyed by the Refinitiv firm.

This element seems to have influenced the mood of investors. In mid-day, Thursday, on the Toronto Stock Exchange, the category B title of the aircraft manufacturer retracted 3.5 %, or, $ 5.64, to negotiate at $ 157. The action nevertheless has increased by 61 % since last January.

“Although the results of the second quarter are lower than forecasts. the trends remain positive for the company, especially on the side of new orders,” said Cameron Doerksen, of National Bank Financial.

Given the size of the order book, which now reaches 16.1 billion US, we can expect to see the Quebec manufacturer deliver more than 150 aircraft for several years, adds the analyst.