At this time of the year, we hear how the giver of gifts is often the one who receives the greatest reward. That may turn out to be the case for Canadian prime minister Stephen Harper, who announced on Saturday a $4-billion (Cdn.) rescue package for his nation’s auto industry.
Critics have derided Harper for failing to do anything to stimulate Canada’s languishing economy. So severe were the attacks that Harper opted two weeks ago to shut down Parliament until January 26 in order to save his job. By working with Ontario, Canada’s most populous province and the one with the overwhelming majority of the nation’s auto-related jobs, Harper showed something he hasn’t during this crisis: leadership and political will to tackle the issue and to convince others to do so as well.
The federal government will contribute $2.7 billion in loans to General Motors and Chrysler subsidiaries based in Canada, and the Ontario provincial government will provide the remaining $1.3 billion. Ford said it doesn’t need a loan at this time, but did ask for a line of credit in the event that it requires quick access to cash.
“This is a huge problem that faces the Ontario economy and the Canadian economy by extension and it is critical that we work together,” Harper said.
The loan package follows the U.S. government’s announced $17.4-billion bailout of The Big Three. It also includes aid for consumers looking for loans and auto-parts suppliers. Harper has also insisted that GM and Chrysler remain committed to keeping plants in Canada, a move sure to win in the public relations arena.
When he needed it the most, Harper came through by acting in what he and many others believes is in the best interest of the Canadian economy. If the financial markets stabilize over the next month, he may be able to hang on to his job because of it.
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