just-auto.com

CANADA: No direct Ontario aid for partsmakers

By just-auto.com editorial team | 7 April 2009

Premier Dalton McGuinty has said the Ontario provincial government, which is facing a record C$14.1bn deficit this year, will not provide direct aid to its ailing auto parts makers.

Canada's auto assembly plants and most of its parts makers are in Ontario.

The province last month pledged up to $1.3bn to General Motors and Chrysler to help their Canadian manufacturing facilities but has no plans to rescue suppliers with emergency financing, McGuinty said, according to the Saskatoon Star Phoenix.

The premier was reported to have said any direct aid to parts makers would come from Export Development Canada. And added that $4bn in Canadian federal government and provincial loans pledged to GM and Chrysler would provide "indirect support" for suppliers, whose products include everything from seats to steering wheels.

"You can't realistically talk about the future of this sector and not take into account our auto parts suppliers," McGuinty said.

"If there are conditions attached to monies that might flow to the auto sector, one of those conditions is going to be that they have to ensure that they are paying their suppliers in addition to maintaining their own operations."

Canadian suppliers have called for more targeted government aid after the US treasury last month announced a $5bn aid package for that country's auto parts makers.