Brazil’s Council of Ministers of the Foreign Trade Chamber (Camex) confirmed it has authorized the opening of a dispute settlement procedure against Canada at the World Trade Organization in response to what it characterizes as state subsidies to Bombardier. The Brazilian authorities cited a $2.5 billion injection of provincial funds by the government in Quebec during 2016 alone and “indications” that the Canadian federal government plans soon to contribute significant capital to ensure artificially low prices for the C Series narrowbody. All told, Brazil claims that Bombardier has received more than $4 billion worth of illegal subsidies from Canada.

Long-time Bombardier rival Embraer applauded Brazil’s decision, calling the alleged subsidies a distortion of the commercial aircraft market.

“The formal dispute settlement process at the WTO is the only means to ensure a level playing field in the market,” said Embraer president and CEO Paulo Cesar Silva. “Canada’s subsidies have caused significant market distortions and are not in compliance with international trade rules.”

For its part, Bombardier dismissed the Embraer complaint as frivilous.

“It is a bit ironic given the level of government subsidies and support Embraer has received," said Bombardier vice president of external relations Olivier Marcil. "Nevertheless we are very confident that all investments associated with Bombardier are fully compliant with all WTO rules and regulations.”