Canada has announced a $4bn bail out plan to aid 2 US Car manufacturers with operations here. The offer of the emergency loans follow the US Government’s decision on Friday of $17.4bn in loans to help General Motors and Chrysler survive.
Prime Minister Stephen Harper said it was ” a regrettable but a necessary step to protect the Canadian economy”. The amount promised represented the 20% share Canada has in the North American automobile industry, he said. The money will help the two companies continue to operate while they restructure their business. The Federal Government will provide C$2.7bn in short term loans, with a further C$1.3bn coming from Ontario, where the manufacturers are based.
“These are extraordinary circumstances that require extraordinary measures”, said Ontario Premier Dalton McGuinty.
Mr Harper said that there were “hundreds of thousands if not millions” in Canada potentially affected by the ongoing difficulties in the Car Industry. He said that the deal ensured that Canada was looking out for their interests and insisted that the deal was “not a blank cheque”.