Anger over Bombardier executive pay puts leaders in Quebec, Ottawa in tight spot

As hundreds gathered this weekend outside the Montreal offices of Bombardier, chanting angrily over executive pay,aQuebec cabinet minister emerged from a sleek black minivan with tinted windows.

Government House leader Jean-Marc Fourniersaid he was there to listen to the protesters.

He was booed and chased away by the crowd.

• Bombardier defers executive compensation plan after backlash

The reactionunderscores the delicate position that Bombardier has created for the federal and provincial politicians who have poured hundreds of millions of dollars into the aerospace company in the past year funding that spared it the ignominy of filing for bankruptcy.

In promptly deciding to award themselves a nearly 50 per cent pay raise, Bombardier's senior executives sparkedsharp public backlash.

So deep was the anger, the executives agreed over the weekend to forgo a portion of the raise until 2020and make it contingent on meeting performance targets.

• After public outcry, Bombardier executive chairman cuts back salary

Now politicians in both Quebec City and Ottawa, who onceboasted of their investments in the company's CSeriesbusiness jet program, are struggling to demonstrate to the electorate thatthey understand theoutrage.

"Like many Canadians, I had concerns," federal Innovation Minister Navdeep Bains said Monday at an aerospace industry event in Montreal.

"I was disappointed, and the company took steps to address the issue."

Times have changed

It wasn't two months ago that Bains, announcing $372.5 million in federal aid for the company, said he was "proud" of the federal government's long-standing relationship with Bombardier.

In the House of Commons, interim Conservative Leader Rona Ambrose asked the prime minister if he was embarrassed by his government's support for Bombardier, given the generous executive pay hike.

"We're obviously not pleased with the decision that Bombardier made around its remuneration for its executives," Justin Trudeau replied.But he added the aid was necessary to secure jobs in the aerospace industry.

• Federal government to give $372.5M in loans to Bombardier

Quebec Premier Philippe Couillard, whose government invested $1.3 billion in 2016 for a share in the CSeries program, has been unabashed about the merits of thatdecision.

"Bombardier still exists, thanks to us," he said in February.

On Monday, Couillardexpressed his "disappointment" about the executive pay raise, saying the company ignored the social and economic context in Quebec.

• Bombardier gets final instalment of Quebec's $1B US investment in CSeries

But the premier also sought to keep the criticism in check, stressing the need to maintain a business-friendly environment.

"I understand that there is some dissatisfaction, a bit of frustration," Couillard said. "But remember the reality of this company and its importance for Quebec."

Bridge over troubled waters

Bombardier is the largest player in the province's aerospace industry, which employs some 40,000 people. The company's future in that industry it also has a large mass-transit division is largely dependent on the success of the CSeries program.

After 2 years of delays, and $2 billion of cost overruns, Bombardier finally started to see orders pick up last year for the single-aisle jet.

U.S. carrier Delta Air Lines Inc. bought 75 CS100 aircraftand has an option foran additional 50 planes. In June, Air Canada announced the purchase of 45 jets, which are marketed for their fuel efficiency and ability to make transatlantic flights.

• Bombardier secures Delta order for up to 125 new CSeries jets

• Air Canada, Bombardier finalize deal for at least 45 CSeries jets

But despite the increase in demand, Bombardier is undertaking a dramatic overhaul of its employee base. It plans to lay off14,500 workers worldwide as part of aneffort toregain financial health.

Those layoffs, combined with the large government investments, havecontributed to the growingindignation over the executive compensation package.

In just a few days, Quebec's small left-leaning party, Qubec Solidaire, has collected 25,000 signatures on a petition calling forthe provincial government to revisit the terms of its deal with Bombardier.

Couillardrejected that proposal outright on Monday.

• Quebec lays out timeline for $1B Bombardier bailout

But his party will be called upon to vote on a motion expected to be tabled by the Parti Qubecoison Tuesday that asks Bombardier's executives to renounce their 2016 bonuses.

The premier declined to answer whether he would vote foror againstthe motion, buthinted he prefers the laissez-faire approach.

"If companies would be subjected to direct government influence in their daily management, that is something that would be very negative for the Quebec economy," he said.