The reality is that Canada had no choice but to pony up with an aid package for the automakers after the U.S. announced its $17.4 billion in loans. The federal and Ontario governments have pledged $4 billion in emergency loans – $3 billion to GM and $1 billion to Chrysler – to be paid out in installments over the next two months. Ford was not included in the deal because they don’t need the cash right now. The terms and conditions imposed on GM and Chrysler are that they:

•    accept limits on executive compensation
•    pay money owed to Canadian parts suppliers
•    provide weekly reports on their finances
•    report any business transaction worth more than $125 million

How do Canadians across Canada feel about the loans to General Motors and Chrysler? According to the Canadian Press Harris-Decima survey:

•    56% of respondents supported the notion of “proportional, repayable loans”
•    Ontario showed the most support, with 62% in favour of the aid package
•    60% in Atlantic Canada were in favour
•    48% in Manitoba and Saskatchewan supported the aid package
•    44% in British Columbia were in favour

Of the $4 billion in loans to General Motors and Chrysler, the federal government is contributing $2.7 billion, while the provincial government is contributing $1.3 billion. In addition the federal government is extending additional account-receivable insurance coverage for automotive suppliers through the Export Development Corporation and creating a new facility to support access to credit for consumers. It is estimated that 400,000 people in Ontario make their living in the auto industry.

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