Canada says jet dispute can be resolved after Bombardier shares fall on Trump threat

By Allison Lampert and David Shepardson

MONTREAL/WASHINGTON Jan 30 (Reuters) – Canadian officials said they were working to resolve a dispute with U.S. President Donald Trump over private jet approvals, after his threats to decertify and slap tariffs on Canada-made aircraft sent shares of Bombardier down 5% in midday trade.

Trump said the sanctions would be applied until Canada’s transportation regulator certified the latest business jet models produced by U.S. rival Gulfstream.

While a White House official told Reuters that Trump was not suggesting decertifying Canadian-built planes currently in operation, the president’s warning on Thursday night caused confusion and alarm among airlines, aviation analysts, and aerospace workers, along with buyers and owners of private jets.

Canadian Industry Minister Melanie Joly told the Canadian network CBC on Friday that while certification should not be politicized, the country’s minister of Transport is in contact with U.S. officials.

“We believe that this can be resolved,” Joly said. “The certification process is well underway and that the certification demands were absolutely recent.”

BROADER TENSIONS

The dispute follows broader tensions between the neighboring countries after Canadian Prime Minister Mark Carney, citing U.S. trade policy, last week urged nations to accept the end of the rules-based global order that Washington had once championed.

One source familiar with the matter said he believed Trump’s threats were linked to these tensions, and not about Gulfstream losing business in the small Canadian market for private aviation. Industry officials said any Canadian delays in certifying Gulfstream’s flagship G700 and G800 large-cabin jets were not a barrier to sales.

“I have not seen this issue defer any purchasing behavior,” added Toronto aviation lawyer Ehsan Monfared at YYZ law.

A Canadian who wishes to buy a Gulfstream plane could put it in a U.S. non-citizen trust and register it in the United States while awaiting certification by regulator Transport Canada, he explained. 

Monfared said he did not believe the regulator was trying to be punitive toward U.S. aircraft.

Savannah-based Gulfstream, a division of General Dynamics, declined comment, along with its parent company. Transport Canada did not return a request for comment.

Aircraft and aerospace parts have largely escaped the brunt of Trump’s U.S.-led trade war, with Canadian-made planes that comply with the USMCA trade agreement continuing to be exported south of the border.

On Thursday night, Trump said he was “decertifying their Bombardier Global Expresses, and all Aircraft made in Canada” until the Gulfstream planes were certified.

“If, for any reason, this situation is not immediately corrected, I am going to charge Canada a 50% Tariff on any and all aircraft sold into the United States of America,” Trump said in a post on Truth Social.

That threat, if carried out, would have a drastic impact on U.S. carriers like American Airlines and Delta Air Lines, which rely on Canadian-made airplanes for many of their regional services.

It also created confusion among buyers and operators of private jets in the United States, the world’s largest market for business aviation.

Soar Aviation Law attorney Amanda Applegate, a U.S. specialist in business aviation law, said on Friday the post had prompted queries from clients who own, or want to buy, Bombardier planes. 

POLITICAL WEAPON

The International Association of Machinists and Aerospace Workers said decertifying aircraft was both dangerous and could result in job losses in the U.S. where Bombardier has 3,000 workers.

“Aircraft certification exists to ensure safety, not to serve as a political or economic weapon,” the IAM said. 

Data provider Cirium has said there are 150 Global Express aircraft in service registered in the U.S., operated by 115 operators, and a total of 5,425 aircraft of various types made in Canada in service registered in the U.S. including narrow-body jets, regional jets and helicopters.

(Allison Lampert in Montreal and David Shepardson in Washington. Additional reporting by Nivedita Balu in Toronto and Mike Stone in Washington; Editing by Kevin Liffey and Philippa Fletcher)