TORONTO - The federal and Ontario governments will provide the Canadian subsidiaries of Detroit's Big Three automakers with $3.29 billion in emergency loans, the prime minister said yesterday.
The announcement followed a pledge Friday by President Bush to offer $17.4 billion in emergency loans to General Motors Corp. and Chrysler L.L.C.
Prime Minister Stephen Harper said that Canada's bailout plan, the equivalent of 20 percent of the U.S. aid package, would help keep the plants afloat while the automakers restructured their businesses to retain one of the country's most important sectors.
"We cannot afford, in the United States or Canada, the catastrophic short-term collapse of the Big Three automakers. 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," said Harper, speaking at a news conference in Toronto.
Canada's automotive industry represents 14 percent of the country's manufacturing output and 23 percent of manufactured exports. It directly employs more than 150,000 Canadians. The country's largest industry within the manufacturing sector, it has been suffering from its slowest sales in 26 years and dwindling operating cash.
Ontario has agree to provide $1.07 billion of the total, since about 400,000 auto-sector workers - both directly and indirectly - work in the province, and the industry is the mainstay of about 12 Ontario communities.
"In Ontario, we've got thousands of people and their families who rely on the auto industry to be on firm ground so they can put food on the table and keep a roof over their heads. . . . No state or province employs more workers, and we're not going to give that up," said Premier Dalton McGuinty, speaking alongside Harper.
Harper and McGuinty stressed that the government would not hand over blank checks, saying that all stakeholders would be expected to make adjustments to reduce structural costs.