Will preserve Canada's share of North American production and help protect jobs
Backgrounder - Canada and Ontario: Joint support for Chrysler restructuring
30 April 2009
Toronto, Ontario
The governments of Canada and Ontario are co-operating to provide loans to support Chrysler Canada Inc. and Chrysler LLC in order to further the companies' efforts to restructure while maintaining Canada's 20% production share in the North American market.
"One month ago, we set very stringent conditions that Chrysler and its stakeholders would have to meet in order to receive additional government loans," said Prime Minister Stephen Harper, who was joined by Ontario Premier Dalton McGuinty, Federal Minister of Industry Tony Clement and Ontario Minister of Economic Development Michael Bryant in making the announcement. "Chrysler's management, unions and financial institutions have made the sacrifices required to meet our conditions. While the situation is difficult for everyone involved, these concessions are necessary for Chrysler to be viable going forward."
The Government of Canada and the Ontario Government will provide $3.775 billion in a joint package of loans to support the restructuring of Chrysler. This support is proportional to the US$12.08 billion package announced today by the U.S. Government.
The loans to Chrysler include an existing interim loan, a short-term working capital loan and a medium-term restructuring loan - all to the company's Canadian operations. In conjunction with the U.S. Government, the Canadian governments are also supporting a court-supervised restructuring of Chrysler LLC through joint Canada-US debtor-in-possession (DIP) loans. The governments of Canada and Ontario will receive a combined 2 percent share in a restructured Chrysler LLC, and Canada will appoint one of the nine board members of the restructured company.
"I want to extend my appreciation to President Obama and to Premier McGuinty for their co-operation in resolving this very difficult situation," said the Prime Minister. "Our government's long-term goal remains the same – to ensure that there is a sustainable and viable North American auto sector in which Canada maintains its share of auto production and jobs."
