Ontario government examining if GM lived up to bailout obligations: Minister

Ontario’s Economic Minister Todd Smith says the province is looking into whether General Motors Co. (GM.N) followed through with the terms tied to the automaker being given billions in aid during the global financial crisis.

GM filed for bankruptcy protection in 2009 and was given about $7.23 billion from the federal government and $3.6 billion from Ontario.

“Clearly, it gave General Motors a bit of life support during that time and kept good-paying jobs in Ontario. But, we’re looking at the numbers involved,” Smith said in an interview with BNN Bloomberg's Amanda Lang Tuesday.

“We’re looking back at that and finding out if the company actually lived up to its obligations with that money that was handed over at that time.”

Smith added that it is difficult to go back in time to assess whether the government made the right decision providing financial assistance to GM in 2009 since the auto industry has changed so much since then.

“I had a conversation on Monday with the [GM] leadership globally, Mary Barra, who said there is nothing that Ontario could do to [change] this decision,” Smith said. “It wasn’t a knee-jerk decision. This is something that has been in the works for a long period of time, and doesn’t just affect the Oshawa facility here in Ontario.”

GM announced Monday it is pulling the plug on seven plants around the world, including five in North America, as part of its restructuring plan. The company said it had no plans to produce vehicles at its Oshawa plant after December 2019.

Smith said the province has helped GM by removing red tape, particularly around the autonomous and electric vehicle sectors, to allow them to invest in their technology centre in Markham, Ont., where the company plans to double the number of workers to 1,000.

“It’s just unfortunate that General Motors sales, when it comes to sedans, has really forced their hand to make these decisions globally, and of course, negatively impacting the folks in Oshawa,” Smith said.

He said the province will help those affected by the job cuts to get retrained, and the government plans to ask Ottawa for extensions on employment insurance benefits.

“Keep in mind that about half of the hourly workers who were affected by the closure announcement yesterday were eligible for early retirement,” Smith said. “So, we’re talking about 1,300 direct jobs at GM that are impacted. We want to make sure that those people land on their feet.”