The Canadian government ended a 2-1/2-year policy of providing no direct financial assistance to automakers and stepped forward with financial support for Ford and General Motors on the eve of an election campaign.

In a three-day span, the government gave Ford C$80m to backstop the reopening of an engine plant and then agreed not to require GM to repay part of a previous financing package in return for a $290m investment by that automaker at its Canadian operations.

The deals with the two auto companies were signed before the government on Sunday chose 14 October as the date for a federal election.

The ruling Conservative party has been chastised by the Canadian Auto Workers union for doing little to aid the Detroit Three automakers at a time when they have been shedding thousands of jobs and closing plants in Canada.

In return for the $80m, Ford will reopen its Essex Engine Plant in hard-hit Windsor, Ontario, and turn it into a flexible engine plant capable of making several different engines as well as a research and development centre. The combined investment by Ford and the government is $730m.

Reopening the plant, which was closed last November, will save an estimated 600 jobs.

GM meanwhile, has agreed to spend $245m at a plant in St Catharines, Ontario, to build a six-speed, front-wheel-drive transmission, invest another $40m at an engineering centre in Oshawa, Ontario, and begin producing a hybrid version of a mid-sized car at its Oshawa car plant beginning in 2011.

The new transmission will help save about 300 jobs at the St Catharines plant.

The money spent at the engineering centre will be used to perform research and development into advanced batteries and fuel-efficient technologies.

There's no new money from the Canadian government for GM.

But the company was faced with the prospect of repaying some money to both that government and the province of Ontario. That's because plant closings announced earlier this year meant the number of GM jobs in Ontario will drop below the levels set by the two governments when they provided GM with $435m in 2005.

GM is eliminating more than 3,500 jobs in Ontario by closing its pickup truck plant in Oshawa next year and a transmission plant in Windsor.