By Tom Bradley

If you’ve been in the business as long as I have, it’s hard to not have an interest in Bombardier. I never had research responsibility for Bomber, but I worked closely with our analyst (Jon Reider) when I was at Richardson Greenshields many moons ago. I also must declare, I think the Dash 8 turboprop is a wonderful little plane.

In that context, it’s disappointing to see the struggles the company is going through. Until they start delivering their C-series airliner, they have some liquidity challenges (too much money going out, not enough coming in). The cost of bringing a new aircraft to market is mind boggling.

The seriousness of the situation revealed itself the other week when the company raised new equity capital by issuing shares at a distressed price and the Quebec government talked about lending a hand.

But I find all of this disconcerting for another reason. When I read all the stories about Bomber’s current challenges, I can’t help but think about a Globe and Mail article from December that revealed the lengths the company has gone to pay as little tax as possible in Canada.

Generally, I’m not one to blame global corporations for taking advantage of tax arbitrage. They have an obligation to maximize their profits and allocate capital in a way that’s best for shareholders. As I’m constantly reminded during discussions at our dinner table, however, it’s necessary for Boards of Directors to find a balance between maximizing after-tax profits and the needs of their other constituents - employees, local communities, the environment and taxpayers.

In the case of Bomber, the management team should be more attentive to the hand that feeds it. In the history of Canada, there are few companies that have benefited more from government largesse than Bombardier – financing, debt guarantees, training grants, customer financing and tax breaks to name a few. For the company that constantly drinks from the taxpayers’ trough (while other Canadian companies get nothing), setting up a complex corporate structure that allows it to pay little or no tax in Canada is appalling. Having a spokeswoman say to the Globe and Mail, "Bombardier's worldwide corporate structure abides by all applicable laws, including tax laws” isn’t good enough.

We need Bombardier not only to survive, but to thrive. We don’t have enough companies in Canada that have the global reach that it does. We also need it to be respectful of one of its key backers, the Canadian taxpayer.