Canada mulls joint auto bailout with USNovember 15th, 2008 - 12:55 pm ICT by IANS
Toronto, Nov 15 (IANS) Canada is mulling the possibility of a joint package with the US to bail out the sinking auto industry in the two countries.Ontario and Quebec provinces of Canada serve as a manufacturing hub for American auto giants, creating thousands of jobs and pumping billions into the economy.
So interlinked is the auto industry in the US and Canada that during the assembly of vehicles some auto parts cross the border up to seven times before the vehicle is completed.
Though Ottawa has already announced a $450-million package for this sector, Industry Minister Tony Clement Friday said the government was also considering joint steps with the US to bail out this ailing industry.
He said he would visit Detroit next week to meet three US automakers and hold discussions with US leaders on the possibility of a joint bailout.
“People talk about the need to have an integrated solution. And from a theoretical point of view, that makes sense. But how viable is it? What exactly does that mean?” the minister said.
With the country on the verge of recession, there was more bad news as the market crisis seems to be taking its toll on the housing sector.
Figures released by the Canadian real estate association Friday said sales in October slumped by 14 percent from September.
This was the worst slump since 1994, the association said. According to it, house prices have also retreated nine percent since last year.
It will be interesting to see the sentiment for November after the government’s announcement to buy $50 billion of mortgage-backed securities from banks to spur lending.
Meanwhile, Toronto Stock Exchange (TSX) woes continued, with the composite index diving 292.82 Friday.
Guided by slipping energy and commodity shares, the index closed the week at 9,055.96, slipping 5.5 percent lower since last week. In fact, the gold sector declined 6.8 percent on the last trading day of the week.
And there was no respite for the Canadian dollar or loonie, as it fell 0.94 cents, ending the week at 81.60 US cents.