February 17, 2009 / 5:22 PM / 9 years ago

Harper sees continued GM presence in Canada

<p>Prime Minister Stephen Harper (L) and Ontario Premier Dalton McGuinty announce major improvements to the GO Transit system during a news conference in Toronto February 17, 2009. REUTERS/Mike Cassese</p>

TORONTO (Reuters) - Canadian Prime Minister Stephen Harper said on Tuesday he is not concerned about the possibility of General Motors Corp moving out of Canada as the Detroit-based company restructures its operations.

“We’ve had good discussions with the company,” Harper told reporters in Toronto. “Obviously, there is a range of options. and the restructuring itself will be quite complex. But I‘m confident that with Canada, with the partnership with Ontario, coming to the table with our share of funding that we’ll maintain a strong industry in this country.”

GM and Chrysler are due to present their restructuring plans to the U.S. government on Tuesday and then to the governments of Canada and the province of Ontario on Friday.

Ontario Premier Dalton McGuinty, who joined Harper on Tuesday in making an announcement on upgrading the province’s commuter rail lines, said he would not speculate on the U.S. automakers’ turnaround plans, but said that his government would do its share to aid the auto industry.

Harper added that he does not rule out further job losses in the auto sector, but said Canada would maintain its share of North American auto production, which is around 20 percent.

Looking to the rest of the Canadian economy, Harper said it is “extremely difficult” to make economic forecasts for this year, but conceded the 2009 federal budget was based on the assumption the economy will worsen.

“We are not going into deficit C$34 billion ($27 billion) this year because we think the economy is going to stay just the way it is,” he said. “We are doing that on the anticipation that we are going to face continued challenging economic news this year.”

He said that Canada’s economy is in better shape than most other countries’, adding that the financial sector is strong and that the housing sector does not have the structural problems that the U.S. housing sector has.

Harper’s comments come on the heels of a weekend meeting of finance ministers from the Group of Seven industrial powers, which ended with a pledge to fight recession without distorting free trade.

On Canada-U.S. relations, Harper said Ottawa would closely watch Washington’s implementation of “buy American” provisions in its economic stimulus packages, but he said he expects the United States will live up to its trade obligations.

Harper said U.S. President Barack Obama’s comments on trade have been “very encouraging”.

Obama sought to ease protectionist concerns in an interview with the Canadian Broadcasting Corp. When asked how concerned Canadians should be about the “buy American” clause, he said, “I don’t they should be too concerned.”

CBC released segments of the interview and will air the full version later on Tuesday.

Trade, energy and the global economic crisis will top the agenda for Obama’s visit to Canada on Thursday, his first foreign trip since taking over the White House last month.

($1=$1.26 Canadian)

Additional reporting by John McCrank; editing by Peter Galloway

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