Canada ready to chip in $4.2B for auto aid
OTTAWA–Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty will toss billions in a lifeline to Canadian automakers following the announcement of the U.S auto rescue package.
Government officials were tight-lipped yesterday over details of the Canadian aid package to be unveiled in Toronto today but provincial officials confirmed it would be 20 per cent of the $17.4 billion (U.S.) total announced by U.S. President George W. Bush yesterday – which means the package would be worth about $3.5 billion (U.S), or $4.2 billion (Cdn.).
The U.S. aid package for the Detroit Three – Chrysler, Ford and General Motors – came a week after federal Industry Minister Tony Clement said there would be no bailout for their Canadian operations unless the Americans acted first.
"We’re seeing it as a positive step, a positive development. It certainly will be good for our domestic market and for the integrated markets between the U.S. and Canada," Clement spokesperson Darren Cunningham said of the U.S. package.
The U.S. bailout was pledged in exchange for concessions from the automakers and their workers – including wage and work rule concessions from the United Auto Workers union that would be competitive with foreign companies by the end of 2009.
"You’ll see similar things in a Canadian package," said Kory Teneckye, Harper’s director of communications, when asked if the Canadian bailout would include the kinds of concessions and controls the U.S. government is demanding.
Canadian Auto Workers president Ken Lewenza said he applauded the U.S. bailout but was critical of the wage and benefit concessions and hoped Harper and McGuinty would not take that route.
"I’m hopeful that they won’t do that, because that will just divide and conquer," he said.
In an interview with CTV scheduled to air tonight, Harper said the Canadian and American auto industries are so entwined that "we cannot have a solution unless we have an integrated approach and an integrated action with the United States administration."
Harper suggested the Canadian package would mirror much of the controls the U.S. is prescribing.
The Prime Minister said the Canadian government and the government of Ontario "have concluded we either do our share of the restructuring or we will have no share of that industry in Canada instant payday loan no telecheck."
"If the United States does all the restructuring themselves, the industry will move to the United States. That’s not acceptable to the government of Canada. So we will work with the Americans, make sure that we get our share of a restructured industry," he said.
"Obviously, as public money goes into that, there will be more public say about how that money is used, but we should be under no illusions: there is going to be significant restructuring. And the aim at the end of this is to make sure that, while those companies will be smaller, they will be viable and they will make money."
A senior Ontario government source who called the Bush announcement "good news" declined to comment on any conditions the Canadian manufacturers would have to accept in return for aid.
McGuinty has suggested the struggling auto companies might have to keep the bailout cash in separate accounts so its use can be tracked and audited to protect the investment by taxpayers.
That is the only way to ensure that the money is used for the purposes intended, said Charles Smedmor, a forensic accountant in Toronto.
Opposition parties have been critical that GM, Ford and Chrysler still have not revealed publicly how many plants might close, or how many jobs will be lost in Canada.
But McGuinty has acknowledged that there will be fewer jobs for Canadians at the Detroit Three despite the fact they will share billions in cash from taxpayers.
Federal Liberal industry critic MP Gerard Kennedy (Parkdale High Park) said he hopes the arrangement is transparent.
"What kind of arrangement is the Canadian government prepared to enter into, how is it going to protect Canadian jobs and the Canadian taxpayers in terms of the kinds of risks the money is being put into, and is there going to be any independent Canadian decision-making here or are we simply going to be following the Americans in every respect?" he asked.