It was announced this weekend that the federal government alongside the province of Ontario will provide $4 billion in emergency aid to the Canadian auto sector. The news came shortly after U.S. President George W. Bush offered US$17.4 billion in emergency loans to American automotive companies last Friday, specifically General Motors Corp. and Chrysler LLC.
“We cannot afford, in the United States or Canada, the catastrophic short-term collapse of the Big Three automakers,” said Harper speaking at a news conference in Toronto. “The U.S. has signaled that they are not going to allow these companies to fail, and we will do our share of the North American package to see that this doesn’t happen either.”
Ontario has agreed to provide $1.3 billion of the total since the province alone employs about 400,000 auto sector workers. The Canadian plan will provide General Motors Canada with loans of up to $3 billion and Chrysler Canada will receive up to $1 billion. Ford Motor Company Canada did not ask for any emergency loans, just a line of credit to draw upon if required. Its parent company in the U.S. says it doesn’t need any government cash now but would be badly damaged if one or both of the other U.S. automakers went under.