Chrysler’s decision to rescind funding request shocks province

TORONTO—Ontario was blindsided by Chrysler’s abrupt decision to bail on a potential deal that could have seen hundreds of millions of government dollars used to upgrade two of its plants, Premier Kathleen Wynne said.

Chrysler Canada had asked Ontario and Ottawa for a reported $700-million as part of a $3.6-billion dollar investment in two plants in the province.

Wynne said talks between federal, provincial and Chrysler representatives were going well, although nothing had been finalized.

So she had no inkling the automaker had changed its mind until Chrysler contacted her this week.

“I was very taken aback,” she said. “I was very surprised by the letter that I received (March 4).”

While Chrysler still plans to invest in its plants in Windsor and Brampton, Ont.—including a new minivan assembly line—it said it won’t be seeking government funds anymore because the issue had become a “political football.”

The federal Conservatives piled on, blaming the “political situation” in Ontario for Chrysler’s decision.

While neither would elaborate, they may be referring to a possible spring election that could see the Progressive Conservatives take power.

Tory Leader Tim Hudak, who is itching for an election, has condemned Chrysler’s request for government cash as “ransom” and “corporate extortion.”

And Ontario could be plunged into an election as soon as this spring if the minority Liberals table a budget that doesn’t satisfy either the Tories or the New Democrats.

There are now “question marks about the future,” since Chrysler appears to only be talking about investments to 2016 and haven’t provided clarity on what happens after that, Wynne said.