McGuinty says $3.4B for autos just a start
TORONTO - A proposed $3.4-billion rescue package for struggling automakers is likely just the beginning of the money Ottawa and Ontario must provide to keep the sector afloat, Ontario Premier Dalton McGuinty said Wednesday.
"This is a bit of a lifeline at this point in time to sustain the industry," McGuinty said.
"We don't know (how high the aid might go) right now, because we haven't completed our due diligence, and neither has Washington, to get a good sense of what's going to be involved ultimately."
The federal and provincial governments announced last week they will provide the equivalent of 20 per cent of whatever emergency aid the Bush administration gives to the companies -- a figure proportional to the number of vehicles produced in Canada.
But the $3.4 billion in aid won't come until the U.S. makes its own plans known after the Senate's failure last week to pass a US$14 billion bridge loan for General Motors and Chrysler.
A report Wednesday suggested the Canadian aid could be as high as US$15 billion to US$25 billion, based on an estimate that preventing a collapse of the Big Three's collapse could cost Washington as much as US$125 billion.
The province has yet to say how much of the $3.4 billion it would be on the hook for, and McGuinty warned it's too early to speculate on how much the rescue package could eventually cost because the province is still assessing documents and plans.
"We have a team of accountants, lawyers, investment bankers in there taking a look at the state of the sector, not just in Ontario but now from a North American perspective, to get a better sense of where this is going to go," he said.
"You want to factor that in with where the sector seems to be going globally, so it's really premature for me to be able to speak to that."
McGuinty said he had a productive meeting with Prime Minister Stephen Harper in Ottawa last Friday, before the aid was announced, but reiterated both governments are allowing the U.S. to take the lead.
"There's a strong shared understanding that this is an integrated industry and any approach that we bring to dealing with this industry should be integrated as well," he said.
NDP Leader Howard Hampton said he believes Ontario's share of the current auto aid will be about $1 billion to $1.5 billion, but that more overall economic aid is needed.
"We should invest a further $2 billion in an economic stimulus package," Hampton said.
"You can tell people `go shopping' and hope that somehow this is going to end, but if you look around ... this is not ending, this is getting worse."
McGuinty's comments came one day after Economic Development Minister Michael Bryant called the possible loss of the auto industry in Ontario a "doomsday scenario."
Citing a provincially commissioned report warning Canada could lose more than 580,000 jobs within five years if the Detroit Three automakers go under, Bryant said the package was needed to avoid a "catastrophic" chain of events.