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Canada: No ‘Bottomless Pit’ For Automaker Bailout

Lawmakers in Canada have pledged to get the auto bailout plan for General Motors and Chrysler ‘right the first time,’ hoping to end taxpayer investments in the industry.

TORONTO (CP) -- Ontario's premier says a proposed bailout for General Motors and Chrysler will be the end of taxpayer investment in the industry.

"This is going to be it," said Dalton McGuinty, referring to the estimated $10 billion in federal and provincial funds being sought by the automakers.

General Motors of Canada Ltd. is seeking about $6 billion while Chrysler Canada Inc. is believed to be looking for about $4 billion. The companies have until March 31 to reach a deal with the two levels of government.

Ontario Economic Development Minister Michael Bryant agreed with McGuinty, saying "there is no bottomless pit of cash" for the automakers.

In Ottawa, Industry Minister Tony Clement said the federal and provincial governments have to get the auto bailout plan "right the first time."

He told the Toronto Star the objective is to have a multi-year plan for both GM and Chrysler and not have a situation where six months from now, "they come to the well a second time."

Clement said Ottawa will work with the Americans "so that we know exactly what the plan is for the Canadian plants and how it intersects with the North American strategy, what the cost factors are going to be and how management is going to be (structured)."

"These are all questions that have to be answered before we can go forward," he said.

But Clement dismissed any suggestion the federal government is going to bail out the automakers' pensions plans.

"I really consider that a provincial issue. My mandate ... is that we are looking at repayable loans as the instruments that the federal government is interested in".

"McGuinty and Bryant acknowledged there would be pension liability for Ontario due to provincial law, but the tab is unknown." (Toronto Star)