The Canadian government will hand over $C100 million ($US73 million) to help Ford of Canada proceed with a plan to transform its Oakville, Ontario, assembly plant, the Toronto Star said on Monday, according to Reuters.

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The funds are part of a $C500 million package for Ontario’s vehicle sector, according to the report, which said the fund will also be tapped by General Motors of Canada at a future date to refurbish its Oshawa, Ontario, operations.


Reuters noted that Ford is mulling transforming its Oakville plant, which makes the Ford Freestar and Mercury Monterey minivans, into a flexible assembly facility that can make multiple models on the same assembly line – the carmaker has long said it could not make a business case for the change without $C200 million in federal and provincial government support.


In April, the province of Ontario unveiled a $C500 million motor industry fund that could be tapped for 10% of a project’s cost up to $C100 million, which would cover its share of the Ford revamp, the report added.


Reuters said that, last month, the carmaker reportedly gave the federal government a mid May deadline to commit the funds or risk losing Ford’s $C1 billion investment.

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The Toronto Star reportedly said the timing of Ottawa’s announcement – in the midst of an election campaign that shows the ruling Liberals trailing in the polls – is meant to guard against cutbacks in manufacturing subsidies if the Conservatives win the June 28 election.


Conservative Party leader Stephen Harper said earlier this month he would cut corporate subsidies in favour of lower business taxes, Reuters added.