The company's decision last week to grant the equivalent of a 50% pay rise to six top executives sparked outrage.
Quebec's government agreed to a CA$1.34bn ($1bn; Â£800m) bailout in 2016, a year after it teetered on the edge of bankruptcy.
Prime Minister Justin Trudeau said he was "not pleased" with the pay hike.
But he welcomed the change of heart.
Protesters gathered outside the firm's headquarters in Montreal on Sunday, hours before Bombardier relented and said the rises would be deferred to 2020.
They will be payable only if the firm achieved performance goals, it said.
"Over the past 75 years, our fellow citizens have always been by our side," said Bombardier chief executive Alain Bellemare on Sunday night.
"It is because of this deep relationship that we are sensitive to the public reaction to our executive compensation practices."
He was one of the six executives who were set to receive payments of CA$43.7m ($32.6m; Â£26.1m) in 2016.
That was up from CA$30m the year before, according to regulatory filings.
Bombardier originally justified the pay increases as a necessary measure to retain top talent.
But two Quebec cabinet ministers pressured the company last week to heed the backlash.
The Quebec Premier Philippe Couillard tweeted that he was "satisfied" with Sunday's climb-down by the firm.
The Quebec government last year invested CA$1.34bn in Bombardier's C-Series aircraft programme in return for a nearly 50% stake.
In February, the federal government agreed to give the company CA$372.5m in interest-free loans.
In 2016, Bombardier also announced lay-offs for 14,500 people, including about 20% of its workforce in Belfast.
The redundancies came as the firm secured orders with Delta Air Lines and Air Canada and made its maiden commercial voyage with Swiss Air Lines.
Canadian plane and train manufacturer Bombardier has said it will defer some hefty executive pay increases following a public outcry.