Bombardier Announces Dividend Rate Applicable to its Series 3 Preferred Shares.

Business Editors

Bombardier Inc. (TSX:BBD.A)(TSX:BBD.B) will, on August 1, 2002, issue Cumulative Redeemable Preferred Shares, Series 3 if holders of at least one million of its Cumulative Redeemable Preferred Shares, Series 2 elect to convert such shares into Series 3 Preferred Shares. In such a case, as of August 1, 2002, the Series 3 Preferred Shares will pay, on a quarterly basis, as and when declared by the Board of Directors of Bombardier Inc., a fixed cash dividend for the following five years that will be based on a fixed rate equal to the product of: (a) the average of the yields to maturity compounded semi-annually, designated on July 11, 2002 by National Bank Financial Inc. and Scotia Capital Inc., that would be carried by Government of Canada bonds if they had been issued on July 11, 2002 with a 5-year maturity, multiplied by (b) a percentage rate determined by Bombardier Inc.

The percentage rate determined by Bombardier Inc. is 115%. The Government of Canada Yield is 4.762%. Accordingly, the annual dividend rate applicable to the Series 3 Preferred Shares for the period of five years beginning on August 1, 2002 will be 5.476%.

Bombardier Inc., a diversified manufacturing and services company, is a world-leading manufacturer of business jets, regional aircraft, rail transportation equipment and motorized recreational products. It also provides financial services and asset management in business areas aligned with its core expertise. Headquartered in Montreal, Canada, the Corporation has a workforce of some 80,000 people in 24 countries throughout the Americas, Europe and Asia-Pacific. Its revenues for the fiscal year ended Jan. 31, 2002 stood at $21.6 billion Cdn. Bombardier shares are traded on the Toronto, Brussels and Frankfurt stock exchanges (BBD, BOM and BBDd.F).