Ottawa has for about two years prevented Pratt & Whitney from exporting aircraft engines to China in a large $ 3 billion transaction, due to risks of industrial espionage.
The Quebec company has so far been unable to obtain from the federal authorities the necessary permit to deliver the goods to its client, the Chinese aeronautical giant AVIC.
Three sources have confirmed that Pratt & Whitney Canada (P&WC) is experiencing particularly long delays from the federal department of Global Affairs Canada.
According to the information obtained, the contract concluded with AVIC provides for the delivery of engines as part of a turboprop regional transport aircraft project.
Four first engines were to be sent to China, we were told.
In July 2018, Pratt & Whitney began the necessary steps to obtain federal authorizations. But his file remained unanswered. Under federal law, the export of certain Canadian goods and technologies cannot be done without the issuance of a permit issued by Global Affairs.
In 2017, P&WC reached a definitive agreement for this $ 3 billion transaction with AVIC. The PW150C engines are to power the aircraft manufacturer’s new aircraft, the MA700.
Despite the fact that Ottawa did not explain its deadlines, a source familiar with the matter, who is familiar with trade with China, explained that the assumptions are limited.
“By blocking the transaction, either Ottawa fears intellectual property theft, or it fears the use of these engines for military purposes,” we were told.
The office of Quebec Minister of the Economy, Pierre Fitzgibbon, confirmed that it had to intervene with Ottawa to try to resolve the problem.
“Representations were made by the minister to the federal government,” declared his spokesperson Noémie Prégent-Charlebois.
Mr. Fitzgibbon is still trying to “resolve the impasse” with the company, which must manufacture the engines at its plant in Longueuil.
In May, PW&C had to lay off 343 employees due to the negative impact of the pandemic on its order book.
Global Affairs said its timeline is usually 40 days to respond to export permit applications that require consultation. However, this procedure may take longer in some cases.
“The response time depends on a number of external factors, including current events in destination countries,” said spokesperson John Babcock.
For its part, the company confirmed that it is still awaiting a response, without specifying the time elapsed since its request.
“Pratt & Whitney Canada remains committed to the Chinese market, which offers very strong growth potential and is recovering at a steady pace from capacity reductions resulting from COVID-19,” said spokesperson Catherine R. Cunningham.
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