TORONTO The Ontario government said on Friday it plans to sell its stake in General Motors Co (GM.N) over the next year or so and will consider other options to raise funds, including the sale of real estate and government-owned assets.
The announcement, unveiled by Finance Minister Charles Sousa at a Toronto business luncheon, comes as Ontario's minority Liberal government prepares to unveil a budget that could throw the Canadian province into a summer election.
Sousa said the government will act when the market permits it to unload the GM stake. It announced plans in September to sell some of its stock, which it said then would leave it with about 36.7 million common shares and about 5.4 million preferred shares.
The stock was acquired when the Canadian and Ontario governments contributed more than C$10 billion ($9.13 billion) to a bailout to keep GM afloat.
The province will also sell the headquarters of provincial liquor monopoly LCBO and will consider selling other real estate assets, including the Ontario Power Generation (OPG) building. Both buildings are on valuable real estate in downtown Toronto.
"We are going to evaluate the best use of these assets as well as the maximum potential of the respective crown business," Sousa said. Proceeds will go into a fund to pay for infrastructure projects across the province.
TD CEO TO HEAD COMMITTEE
Looking farther out, Sousa said the province has appointed a committee led by Chief Executive Ed Clark of Toronto-Dominion Bank (TD.TO) to examine other ways to wring money out of government-owned assets such as the LCBO, OPG and Hydro One, the operator of the province's electricity grid.
Sousa said the group will consider options that could include corporate reorganization, acquisitions, mergers and public-private partnerships.
Sousa did not rule out outright sales, but said the council will give preference to owning rather than selling core assets.
"We are going to determine what business the government should be owning and what it shouldn't," he said.
Sousa said options could include bringing Ontario's pension system in to take ownership positions in government-owned assets.
The plan will be part of the 2014-15 budget, which Sousa plans to unveil over the next few weeks.
The center-left Liberals have been in power for 10 years in Canada's most populous province, home to most of its banks and a large part of its manufacturing sector.
But with only 48 of the 107 seats in the Ontario legislature, the party needs support from at least one other party to pass the budget and avoid triggering an election.
The left-leaning New Democratic Party supported last year's budget and will be key to this year's version passing, as the right-leaning Progressive Conservatives are unlikely to support it.
Speaking to reporters after the announcement, Peter Tabuns, an NDP member of the provincial legislature, said he believed Sousa was setting the stage for privatization of provincial assets.
"We will not support privatization; not part of our program," he said.
The provincial government is looking to fund expanded subway and other rail transit in the Greater Toronto Area, as well as highway construction, among other initiatives.
TD's Clark said last year that he will step down from his post in November. TD is Canada's second-largest bank by market capitalization.
($1 = 1.0954 Canadian Dollars)
(Additional reporting by Solarina Ho; Editing by Jeffrey Hodgson and Dan Grebler)