Late Thursday, Foreign Minister Chrystia Freeland said "Boeing's petition is clearly aimed at blocking Bombardier's new aircraft" from the USA market, and hinted at retribution.
"Canada is reviewing current military procurement that relates to Boeing", Freeland said in a statement.
Boeing argued at a hearing in Washington on Thursday that duties should be imposed on Bombardier's new larger CSeries passenger aircraft, insisting it receives Canadian government subsidies that give it an advantage internationally.
The Boeing charge has been widely criticized by many aviation analysts as plane makers routinely sell initial aircraft at below-cost prices to win market traction, while Bombardier is offering a jet with little or no overlap to the USA company's own products. She said the government strongly disagrees with the Commerce Department's decision to initiate anti-dumping and countervailing duty investigations.
Mnuchin was testifying before the Senate Banking, Housing and Urban Affairs Committee - his first appearance before that committee since being sworn in.
The move adds to existing trade tensions between the US and Canada, centered on the lumber and dairy industries. A preliminary determination on the petition is expected by June 12. If Bombardier reaches its stated goal, he said, it would squeeze Boeing from that market and cost the company US$330 million a year in annual sales.
Bombardier said last month it worked to ensure compliance with the laws of countries where it operates and spent about $3 billion annually with American suppliers.
Lawyers for the USA aerospace giant argued Thursday that Bombardier's own words prove it was rescued financially by multibillion-dollar assistance from the Quebec government, which a year ago invested US$1 billion in exchange for a 49.5 per cent stake in the CSeries.
The probe could lead to US taxes on Bombardier's new jetliner, while also pitting Boeing against Delta Air Lines (DAL) , a Bombardier customer. She also hinted that Ottawa might take action against the U.S. company. Bombardier said its planes never competed with Boeing in the sale to Delta.
A USA aeronautics powerhouse is at a hearing arguing for duties on Bombardier aircraft. The U.S. and the European Union have been embroiled for years in disputes related to subsidies provided to Boeing and Airbus SE. Bombardier revenues previous year were US$16.3 billion, including US$9.9 billion from aerospace activities.