Canada pledges $3.2B in auto aid

December 21, 2008 at 12:00a.m.

TORONTO (AP) — The federal and Ontario governments will provide the Canadian subsidiaries of the Detroit Three automakers with 4 billion Canadian dollars ($3.29 billion) in emergency loans, the prime minister said Saturday.

The announcement follows a pledge Friday by U.S. President George W. Bush to offer $17.4 billion in emergency loans to General Motors Corp. and Chrysler LLC.

Prime Minister Stephen Harper said Canada’s bailout plan, the equivalent of 20 percent of the U.S. aid package, will help keep the plants afloat while the automakers restructure their businesses to retain one the country’s most important economic sectors.

“We cannot afford, in the United States or Canada, the catastrophic short-term collapse of the Big Three automakers. The U.S. has signaled that they are not going to allow these companies to fail, and we will do our share of the North American package to see that this doesn’t happen either,” said Harper at a news conference in Toronto.