3 Min Read
VICTORIA, British Columbia (Reuters) - Canada has no immediate plans to sell its shares in General Motors Co, Finance Minister Jim Flaherty said on Friday, and the province of Ontario said it would offload its GM stake only when it can get the "best possible return" for taxpayers.
Both were responding to a report in the Globe and Mail newspaper on Friday that said Ontario's finance minister believed it was time for both the Canadian and Ontario governments to shed their GM shares.
"I don't think at this time it would be in our interest, the taxpayers of Canada, to engage in a fire sale of those shares, and I don't intend to do it right now," Flaherty told reporters in Victoria, British Columbia.
The two governments became shareholders of GM in 2009 when they contributed a combined C$10.8 billion ($10.89 billion) to a bailout to keep GM afloat. The U.S. government provided about US$50 billion.
Canada and Ontario's combined 9 percent stake, made up of around 140 million common shares and 16.1 million preferred shares, was worth C$3.5 billion at the end of September.
"I was in the private sector for many years. I wasn't in the habit of selling stocks at half their price," Flaherty said.
Separately, Aly Vitunski, a spokeswoman for Ontario Finance Minister Dwight Duncan, said Ontario will sell its GM shares "when the time and circumstances are appropriate and in a judicious manner to ensure that Ontarians receive the best possible return on their investment".
The Globe had quoted Duncan as saying that "the sooner we're out of the stock the better".
Selling the stock would give an immediate boost to the coffers of both governments, which are both trying to reduce their budget deficits, the newspaper said. That is because the book value of the shares on the government's books is much lower than the current share price.
The Canadian Auto Workers union, which represents about 61,000 workers in the country's auto industry, urged the governments to hold on to their stakes, saying they could use them as leverage to try to get a larger GM production footprint in Canada in future.
"This industry's presence in Ontario is too important to Ontario's economic and fiscal health for government not to play a central role," CAW president Ken Lewenza said in a statement.
Flaherty said he has had "continuing discussions" on the subject of the GM stake with U.S. Treasury Secretary Timothy Geithner.
Reporting By Jennifer Kwan in Victoria, Nicole Mordant in Vancouver and Claire Sibonney in Toronto; Editing by Peter Galloway and M.D. Golan