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“There are indications that Canada’s federal government soon intends to make another significant capital injection in the company to ensure the viability of the new CSeries and its placement in the market at artificially reduced prices,” the Brazilian Foreign Ministry said in a statement.

Bombardier’s chief executive said last week the company was still seeking federal funds.

Prime Minister Justin Trudeau said the government was working “very productively” with Bombardier and he hoped to make announcements in coming months.

“Canada’s subsidies have created serious distortions in the market, in addition to violating current international norms,” said Embraer Chief Executive Paulo Cesar Silva in a statement welcoming the Brazilian government’s decision.

Bombardier, which considered bankruptcy protection last year, got a $1 billion bailout from the Quebec government. The planemaker also sold a 30 per cent stake in its rail division to public and private pension fund manager Caisse de depot et placement du Quebec for $1.5 billion.

Foreign Minister Jose Serra told Reuters in July that Brazil was mulling a WTO challenge of investments in Bombardier, which Trudeau brushed off the following day.

“There is no country in the world that doesn’t heavily subsidize its aerospace sector,” he said at the time.

Embraer shares were little changed on the news, slipping 1 per cent from Friday’s close, while Bombardier opened 4 per cent higher.

© Thomson Reuters 2016