PACP Committee News Release
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Standing Committee on Public Accounts |
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Comité permanent des comptes publics |
For immediate release
NEWS RELEASE
RESTUCTURING ASSISTANCE PROVIDED TO CHRYSLER AND GENERAL MOTORS CONTRIBUTED TO THEIR VIABILITY IN CANADA BUT IT IS IMPORTANT TO REVIEW LESSONS LEARNED
Ottawa, May 11, 2015 -
OTTAWA – The restructuring assistance provided to Chrysler and General Motors during the 2008 financial crisis contributed to their viability in Canada, but Industry Canada needs to conduct a review of its management of the restructuring assistance in order to identify the lessons learned, according to the Standing Committee on Public Accounts’ report presented today in the House of Commons by Committee Chair David Christopherson.
The Canadian automotive industry generates about 10% of Canada’s manufacturing gross domestic product and employs 117,000 Canadians directly and another 377,000 Canadians indirectly. The 2008 financial crisis made it difficult for consumers to obtain car loans and for manufacturers, parts companies and car dealers to secure financing for their operations in Canada. In response, the federal government, in collaboration with the Government of Ontario, provided restructuring assistance to Chrysler and General Motors and created the Automotive Innovation Fund, which is a federal program that provides financial support for eligible investment projects undertaken by automotive companies in Canada.
In its Fall 2014 Report, the Office of the Auditor General released a performance audit that examined whether Industry Canada, the Department of Finance Canada and Export Development Canada, in fulfilling their respective roles and responsibilities, managed the restructuring assistance in a way that contributed to the viability of Chrysler and General Motors and the competitiveness of the automotive sector in Canada. The audit also examined whether Industry Canada had managed the Automotive Innovation Fund program in a manner that took risks into account and had monitored and reported on measurements of results against the program’s objectives.
The Office of the Auditor General concluded that in spite of the complexity of the restructuring transactions, the high uncertainty and the tight time frames, Industry Canada, the Department of Finance Canada and Export Development Canada managed the restructuring assistance in a way that contributed to the viability of Chrysler and General Motors in Canada. However, Industry Canada did not have final restructuring plans for the companies in Canada and there was no comprehensive reporting of restructuring assistance information to Parliament and Canadians. The Office of the Auditor General also concluded that Industry Canada adequately tracked the progress of projects funded through the Automotive Innovation Fund but had not yet used this information to determine whether the program was achieving its objectives.
In its report, the Committee observed that Industry Canada had published a report on its restructuring assistance. The Committee also recommends that Industry Canada provide the Committee with the lessons learned from its review of the management of the restructuring assistance provided to Chrysler and General Motors.
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