November 13, 2008 / 6:39 PM / 9 years ago

Opposition parties demand Ottawa do more for autos

OTTAWA (Reuters) - Opposition parties, which together control a majority of seats in the House of Commons, demanded on Thursday that the Conservative government do more to help the country’s ailing auto sector.

The parties say the automakers will be in even bigger danger if Ottawa does not respond to a planned $25 billion aid package that the U.S. Congress is discussing with General Motors Corp, Ford Motor Co and Chrysler.

Canada’s minority Conservative government is considering whether to offer aid, but says it does not want the auto sector to become dependent on handouts.

The country’s auto industry is concentrated in the powerful central province of Ontario, where local politicians say the sector and associated industries employ 400,000 people and represent 5 percent of the country’s gross domestic product.

Michael Ignatieff, front-runner in the race to become new leader of the main opposition Liberal Party, says Ottawa needs to sit down with the Ontario government and work out ways to help the sector through its woes.

“The jobs of thousands upon thousands of hard-working, extremely productive Canadian workers depends on the survival of the Big Three,” he told a news conference, saying he did not think letting the firms go bankrupt was a good idea.

“We’ve got a transition period of two or three years when this market is very tough, so we have to have transitional help -- not permanent help -- to get them from where they are now to where they will be. I‘m confident they can make it,” Ignatieff said.

The second-largest federal opposition party is the separatist Bloc Quebecois, whose leader Gilles Duceppe said Ottawa should be helping all manufacturers.

“(The aid should) apply also to the automobile sector, concerning loan guarantees or reimbursable credits for research and development,” he told reporters on Thursday.

Duceppe said he would present more details of what he wanted next week before the government unveiled its plans on Wednesday for the new session of Parliament.

Jack Layton, leader of the left-leaning New Democrats, said it would be “a disaster for the economy” if Ottawa did not respond to the U.S. aid package.

He said he had told Prime Minister Stephen Harper that “if we don’t take action, we are essentially sacrificing our auto industry because the Americans are going to act”.

Layton told reporters late on Wednesday that any Canadian aid plan should involve guaranteeing lines of credit as well as insisting that manufacturers produce more fuel efficient cars.

Although the federal government has promised the auto sector some C$450 million ($365 million) in support, Ontario Premier Dalton McGuinty says much more needs to be done.

McGuinty, who is pressing Ottawa for an aid package for the sector, is scheduled to meet with automakers on Friday.

($1=$1.24 Canadian)

With additional reporting by Randall Palmer; editing by Rob Wilson

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