OTTAWA/TORONTO Feb 12 Finance Minister Jim
Flaherty, freshly armed with C$500 million ($455 million) to
subsidize Canada's auto sector, signaled on Wednesday the
federal government might offer substantial cash to keep Chrysler
Group from closing an Ontario minivan plant.
Fiat SpA Chief Executive Sergio Marchionne said
last month that Chrysler could scrap an upgrade of the Windsor,
Ontario, plant and move production and jobs elsewhere if
government fails to come through with financial incentives.
Canada's Conservative Party government sharply increased
money available for its Automotive Innovation Fund in its annual
budget on Tuesday as it seeks to arrest the decline in the
country's share of North American car manufacturing.
Flaherty said not all of the new money was designed to meet
what he called Chrysler's "substantial" demands. He added that
he was not saying automobile plant subsidies should be seen as
But he did tell reporters: "I am saying that we need to give
it a long, hard look and make sure that we are careful in what
we do before we let one of the large auto manufacturers leave
The Globe and Mail, citing unidentified sources, reported on
Tuesday that Chrysler was seeking a contribution of at least
C$700 million from the Canadian and Ontario governments.
Chrysler representatives declined to comment on the report.
Marchionne will be speaking at the opening ceremonies of the
2014 Canadian International AutoShow in Toronto on Thursday.
Ontario officials could not immediately be reached for
The car industry is economically critical, as the largest
manufacturing sector of Canada's most populous province,
Ontario, which happens to be Flaherty's home province.
"This is not to be treated lightly. It's not so much the
thousands of people that work in the assembly plants, it's all
the people that depend on the plants, that work around the
plant, the suppliers, the restaurant owners, the truck drivers,"
"There are lots of people who depend on these large
industries, so I'm very slow to let them go, and I'm probably in
terms of my colleagues the most adamant in support of auto
manufacturing as a hub."
Since 2008 the Conservative government had been making
available C$50 million a year in subsidies through the
Automotive Innovation Fund. Tuesday's budget said it would be
adding C$250 million a year in the next two fiscal years.