Canada's auto warranty program ends before it started

OTTAWA–Canada's auto warranty program, designed to help out the troubled North American car industry, has come to an end without costing taxpayers a dime, Industry Minister Tony Clement says.

"It was never activated because it was conditional upon either Chrysler or GM going into (bankruptcy protection) in Canada and neither of them happened," Clement told the Toronto Star yesterday.

"Anytime we can save money for the taxpayers, that's a good day," Clement said.

Clement in April announced a $185 million program to guarantee warranties for new cars purchased from either company, but since neither company had to seek the protection of the Companies' Creditors Arrangement Act, consumers didn't have to turn to the government program.

"It was necessary because there was some uncertainty at the time about whether these companies were going to go into bankruptcy protection and whether it was going to affect their car sales if people didn't think their warranties were going to be covered," Clement told the Star.

The Canadian warranty program paralleled the U.S. warranty program announced by President Barack Obama in March.

The U.S., where the two companies did go into bankruptcy protection, has also since terminated its program.

Clement said the good news is that Canadian car sales are up 5.3 per cent year over year and North American-built car sales are up 6.3 per cent in the passenger vehicle category.

"I think it will be an industry that will be smaller but it will be sustainable," he said.

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