Canadian manufacturers seek help amid crisis

Tue Nov 4, 2008 9:46am EST
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TORONTO (Reuters) - Canadian manufacturers are asking the federal government for loan guarantees and lines of credit to help them combat the effects of the global financial crisis, the Canadian Manufacturers and Exporters association said Tuesday.

The move comes one week after Ottawa balked at a similar request from the auto-parts manufacturing industry, hard hit by slumping U.S. auto sales and a liquidity crunch that is drying up regular funding.

An official at the Canadian Manufacturers and Exporters association said the group had sent a letter to Prime Minister Stephen Harper seeking federal assistance for Canadian manufacturers in the form of loan guarantees and credit lines, but would not immediately comment further.

Kory Teneycke, spokesman for Prime Minister Stephen Harper, said the government receives "literally hundreds" of pre-budget requests. "We acknowledge receipt and we'll respond in due course," he said.

Teneycke pointed out that the government had already increased the borrowing capacity of the federal agency Export Development Canada and that the government's Business Development Bank was also taking steps to improve liquidity.

The request is the latest sign of pain in Canada's once booming industrial sector and comes one day after Canada's Finance Department announced Ontario -- where much of the country's manufacturing industry is located -- would be given its first-ever payment under the equalization program designed for the nation's poorer provinces.

(Reporting by Richard Valdmanis and Randall Palmer; Editing by Peter Galloway)