G/SCM/Q2/CAN/61  
 
6 May 2014  
(14-2774)  Page: 1/2  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
QUESTIONS POSED BY THE UNITED STATES REGARDING THE NEW 
AND FULL NOTIFICATION OF CANADA1 
The following communication, dated 2 May 2014, is being circulated at the request of the 
Delegation of the United States.  
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  Question 1 
 
PRECARN  
According to the description, one of the program's objectives is to "boost the productivity, agility 
and global competitiveness of Canadian firms th rough the development and application of robotics 
and intelligent systems-enabled solutions that have market demand". Please clarify whether 
access to funding under this program is limited to entities involved in the development and 
production of "robotics and intelligent systems-enabled solutions".  Question 2 
 
Strategic Aerospace and Defence Initiative  
In December 2010, the Government of Canada  announced that it had made a "repayable 
investment" of $300 million under this program to Pratt & Whitney. See "Harper Government 
Announces Major Aerospace Investment to Create Jobs and Keep Canada Cutting-Edge", 
http://www.ic.gc.ca/eic/site/ic1.nsf/eng/06147.html . Canada's notification states that it covers 
fiscal year 2009/2010, but does not indicate the time period for that fiscal year. Can Canada 
confirm whether or not this investment was made during the notified period?   
Question 3 
 The description of the program indicates that assistance is made through contributions of up to 40 
per cent of the eligible costs of the research. Can Canada explain how a "repayable investment" 
into research (rather than into a company) operates under this program?  
Question 4 
 Crédits d'impôt pour la Gaspésie et certaines régions maritimes du Québec 
 
Public information indicates that entities in the maritime industries receive higher levels of tax 
benefits under this program than entities in other covered industries. Could Canada please explain how these differential benefits are provided under this tax program as well as the policy objective 
and purpose of such different treatment? 
 
                                               
1 G/SCM/N/253/CAN.  G/SCM/Q2/CAN/61 
 
- 2 - 
 
   
PROVINCIAL PROGRAMS NOT NOTIFIED  Public sources indicate that Canada's provincial governments administer several programs that 
were not included in this notification. For certain of these programs, the United States has 
previously asked Canada in prior submissions to explain why the program was not notified 
pursuant to Article 25 of the Subsidies Agreemen t. For example, the Secretariat's Report in 
Canada's 2011 Trade Policy Review states that "Fed eral and provincial incentives are available in 
areas such as film and TV production; investment; research and development; mineral exploration; and renewable energy". See W/TPR/S/246 at pg. xi, para. 13. The United States 
expresses its concern that Canada's current notification still does not notify such programs. Could 
Canada address why it has not notified programs that the Secretariat was able to identify? 
 Question 5 
 
Investissement Qu ébec; Government of Qu ébec Aeronautical Development Strategy 
 
Canada's most recent response on Investissement Québec (see G/SCM/Q2/CAN/38, 9 April 2010) 
acknowledges that this program provides "tax assistance" to a limited set of raw materials 
processing industries. Can Canada please explain why it did not notify this program pursuant to Article 25?  
 
Question 6  
Regarding Government of Quebec support for the aerospace industry, Canada's previous response 
has been to state that the Québec Aeronautical Development Strategy "is not a programme and therefore has no budget". See G/SCM/Q2/CAN/38. However, there have been numerous reports 
over the years that the Quebec provincial gove rnment has provided loans and loan guarantees 
through Investissement Quebec to support the aerospace industry. For example, in December 2004, it was reported that Investissement Québec provided $750 million in loan guarantees to Bombardier in order to back sales of about 100 regional jets. In addition, in May 2005 
Investissement Québec provided $75 million in royalty-based financing to Pratt & Whitney for 
research and development. This was to be distributed over 3 years and repayment was reportedly not scheduled to begin until 2030. It has also been reported that Investissement Québec has 
provided $118 million in financing for a plant ne ar Montreal that will be used to assemble 
Bombardier's new C-Series aircraft. According to Quebec public documents, the first disbursement was made in July 2009 (FY 2009-2010), i.e. in the period covered by current notification. Can 
Canada explain why its current and previous notifications make no reference to these activities of 
the Quebec government?   Question 7 
 
Government of Quebec Program for Lab Research Inc.   
 
Canada's response in G/SCM/Q2/CAN/38 to US questions on this program acknowledges that the 
Government of Quebec has provided funding to a company that engages in commercial research and development on a contract basis. Canada's previous response, however, does not explain why 
the program need not be notified. Can Canada please explain why it did not notify this program 
pursuant to Article 25?   
 
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