Auto sector bailout info tough to track, auditor general finds
by The Canadian Press
Michael Ferguson said bailout data tough to find because no single department was in charge of collecting, reporting information
OTTAWA—Canadians would have to sift through a stack of different reports if they wanted to piece together how their tax dollars were spent on big auto bailouts, says a new report by the federal auditor general.
The document, tabled Nov. 25, outlined how auditor general Michael Ferguson’s team struggled to get a full picture of the aid given to automakers, whether the money made a difference and how much was recovered and lost.
The auditor general said it’s because no single department or agency was in charge of collecting and reporting all the information.
Instead, the federal Finance department, Export Development Canada (EDC) and Industry Canada all reported separately, an approach the auditor general concluded put limits on the usefulness of the details.
The auditor general’s office recommended that those entities, along with other relevant players, should publish a report with clear information on the financial help provided to Chrysler Group LLC and General Motors Co. (GM), such as total cash disbursed and how it was used.
It also called on the government to explain what kind of impact the support had on the health of the companies.
The government responded by saying it would publish a final report on the financial help given to GM and Chrysler before the end of the year.
“The financial assistance provided to Chrysler and General Motors … for their restructuring involved complex transactions, high uncertainty, and tight time frames during its development and execution,” the report said.
“These circumstances had an impact on what Industry Canada could do to manage this assistance.”
Otherwise, Ferguson’s team had few gripes with the way in which the government handled its support for Canada’s struggling auto sector when the global economy took a nose dive in 2008.
At the time, the credit crunch made it difficult for people to get car loans.
The sharp drop in sales hurt automakers such as Chrysler and GM, which could no longer generate enough cash to run their operations.
The car companies couldn’t turn to the flagging financial markets for help, so they looked to the government.
The federal and Ontario governments contributed a combined $13.7 billion to Chrysler Canada and GM Canada in 2009.
The auditor general concluded that Industry Canada, Finance Canada and EDC each managed the support in a way that increased the “viability” of the auto companies and boosted competitiveness in the Canadian industry over the short and medium terms.
The report also found while there were some weaknesses in the management and reporting of assistance, Industry Canada “adequately assessed” the recovery prospects of Chrysler and GM.
It added that Finance “adequately estimated” the financial risks of helping the car manufacturers and EDC “adequately administered and executed” the loans and associated documents for the assistance.