21 Dec 2008

Canada follows US with auto aid package

7:07 am on 21 December 2008

The Canadian and Ontario governments will provide $C4 billion ($US3.3 billion) in emergency loans to the Canadian arms of the US auto industry to keep them operating while they restructure their businesses.

The package was announced by Canadian Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty on Saturday. The White House announced a $US17.4 billion package to shore up Detroit's auto industry on Friday.

The federal government will provide $C2.7 billion in short-term loans and Ontario $C1.3 billion. Mr Harper said the government hopes to recover this money but recognizes some of it is at risk.

He said Canada would not allow a restructuring of the industry in a way that might cause the relocation of Canadian facilities to the United States. Canada has 20% the production capacity of the North American market.