Canada Follows The Footsteps of U.S Government, Provides $4bn Loan

After US Government announced to provide $17.4bn to the save the automakers from bankruptcy, different nations have also got up from their sleep. Canadian government's has also stepped forward to provide emergency loan to the auto industry. The $4 billion auto loan that has been promised by the government will definitely give a boost to the automakers. Though the amount is mere 20% of that provided by the U.S government, it would prevent the automakers from collapsing.

Prime Minister of Canada Stephen Harper indicated that besides the $4 billion emergency loan, the government would also extend additional insurance to auto parts makers. The government is also on the lookout to come up with a program to finance consumer loans for new car purchases. Mr. Harper said, “I will not fool you, There is obviously money at risk here and there may well be more money at risk going forward. There are literally across the country hundreds of thousands, if not millions, of potentially affected families by the distress of this industry, We don’t want a package that simply helps the Detroit Three,”

While the governments are providing loans, the status of labor agreements between the car companies and the Canadian Auto Workers Union is still undecided. Earlier, the Canadian Union had refused to agree to a wage system by the United Auto Workers according to which new employees would work on a lower wage scale.