By Brad Haynes and Alonso Soto

SAO PAULO/BRASILIA (Reuters) - Brazil opened a formal complaint against Canada at the World Trade Organization (WTO) on Wednesday, accusing the country of distorting the global aerospace industry with subsidies for planemaker Bombardier Inc (BBDb.TO).

Brazil has threatened for months to open the WTO dispute, arguing that support for Bombardier's new CSeries was undercutting the market for commercial jets made by Brazilian rival Embraer SA (EMBR3.SA).

The case builds on decades of antagonism between the two regional jet makers and echoes arguments in the world's largest trade dispute, a transatlantic spat over government support for Boeing Co (BA.N) and Airbus Group SE (AIR.PA).

Brazil's action came on the heels of fresh support for Bombardier on Tuesday in the form of interest-free loans worth C$373 million ($283 million) from the Canadian government. Canada's Trade Minister Francois-Philippe Champagne said the loans complied with WTO rules and the government would defend itself against litigation.

Brazil's Foreign Ministry criticized "at least $2.5 billion in government support" for the Canadian planemaker last year and a senior official said the complaint would include the loans announced on Tuesday.

"It is the understanding of Brazil that these Canadian subsidies artificially affect international competitiveness," the ministry said in a statement.

The province of Quebec, where Bombardier is based, injected $1 billion into the company's CSeries program last year. The province's largest pension fund also invested $1.5 billion in the company's rail unit.

Embraer Chief Executive Officer Paulo Cesar Silva said in a statement that the ongoing cash injections "have not only been fundamental in the development and survival of the CSeries program, but have also allowed Bombardier to offer its aircraft at artificially low prices."

STEEP DELTA DISCOUNT

Last year, Bombardier scored an order from Delta Air Lines Inc (DAL.N) for 75 CSeries jets, worth some $5.6 billion at list prices, beating out Embraer's competing E-Jets with below break-even prices, according to the Brazilians.

Two sources familiar with the deal said Bombardier offered a roughly two-thirds discount to win the order, its biggest to date for the fledgling CSeries program.

Bombardier booked a $500 million "onerous contract" charge related to that Delta order and a separate deal with Air Canada (AC.TO).

Carlos Cozendey, undersecretary for economic affairs at Brazil's Foreign Ministry, said that subsidies had been key in helping Bombardier win the Delta contract and could influence more sales campaigns this year.