Canada Bails Out Auto Makers
OTTAWA, Canada (Blue MauMau) - Prime Minister Stephen Harper announced Saturday that Canada will provide C$4 billion (US$3.29 billion) in loans to bail out the Canadian subsidiaries of American car manufacturers General Motors and Chrysler. It will also provide a line of credit to Ford.
The bailout is roughly 20 percent of the amount that was announced by the U.S. just a day earlier. That is a larger proportional jump-start than the United States' $17 billion bailout. Canada's GDP is only 9% of the their southern neighbors' (2006 estimate). Its automotive industry directly employs some 150,000 workers.
“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.”
The federal and provincial governments announced that it will exercise oversight over the use of taxpayer money, rather than just issue a blank check and turn away. In addition, suppliers will have greater access to accounts receivable insurance to compensate for the reduced availability of credit and Canada plans to create a new facility for consumers to access better car loans and dealer financing credit.
“With these measures taken together, Canada is following a holistic approach that will benefit the entire supply chain,” said the Prime Minister.
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