Prime Minister Harper and Premier McGuinty announce financial support for the auto industry
OTTAWA - Canadian automakers will receive conditional financial support to help them with their Canadian operations. Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty today announced that the Government of Canada and the Government of Ontario would provide $4 billion in loans payable to General Motors of Canada Limited and Chrysler Canada Inc. through Export Development Canada (EDC).
"This is a regrettable but necessary step to protect the Canadian economy," said Prime Minister Harper. "Canadian taxpayers now expect their money will be used to restructure and renew the automotive industry in this country and ensure that Canada maintains our current production share of the North American market."
"Here 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. What the Prime Minister and I are saying is that those people and their jobs are worth fighting for," said Premier McGuinty.
There will be conditions to the financing extended to automakers. The federal and provincial governments will exercise oversight over the use of taxpayer money as part of its ongoing due diligence. Every stakeholder in the auto industry will also be expected to do their part to reduce structural costs and ensure a viable auto industry in Canada.
The Prime Minister also announced two additional steps the federal government will take to support the overall competitiveness of the auto industry. Automotive suppliers will have greater access to accounts receivable insurance through EDC coverage to compensate for the reduced availability of credit. In, addition the Government of Canada will create a new facility to support access to credit for consumers with particular attention paid to improve the accessibility of car loans and dealer financing.
"With these measures taken together, Canada is following a holistic approach that will benefit the entire supply chain," said the Prime Minister.
The automotive industry in Canada directly represents 14 per cent of the country's manufacturing output, 23 per cent of manufactured exports, and directly employs over 150 000 Canadians. It is the country's largest industry within the manufacturing sector.