PM hints at auto bailout

Harper today said that Ottawa would be looking at "all possibilities" but fell short of promising concrete action.

Speaking after an afternoon meeting with premiers on the economy, the prime minister acknowledged that the collapse of auto firms would have "tremendous dislocation" on the economy.

But he also said that the government needs some assurance that it's investments in the troubled firms are sound.

Ontario Premier Dalton McGuinty, who went into the meeting seeking aid for the auto sector, sounded cautiously optimistic at the end of the three-hour meeting.

"I think there's an opening here for us," McGuinty said.

"We're going to have to find some way to strengthen our level of support," he said.

Earlier in the day, as provincial and territorial leaders caucused before their three-hour session this afternoon, McGuinty said urgent help is needed.

"Is there something worth fighting for here? I think so. We're the largest auto producer in North America," the premier told reporters this morning.

"We need ... stronger supports to the Canadian auto sector, which happens to be pretty well exclusively located in the province of Ontario," he said.

"It contributes about five per cent of our GDP, about $28 billion. We're talking about 400,000 jobs, direct and indirect, and the auto sector is the mainstay of about 12 Ontario communities."

While Ontario sources have suggested Ottawa contribute $4 billion in auto relief, McGuinty declined to name a specific price other than to say there should be "proportionality" with the U.S.

"The Bush administration has already come to the table with $25 billion in support and that's before the global economic crisis hit. Yesterday, Australia announced over $2 billion in support for its auto sector. There's a proposal before the European Union to the tune of some 40 billion euros," he said.

McGuinty insisted he was not going to broach the topic of equalization given that Ontario is now a "have-not" province receiving $347 million next year from the national wealth-sharing program.

"Today, Ontarians expect me to be here ... to speak to an issue that is more immediate in nature, and that's the global economic crisis."

Saskatchewan Premier Brad Wall emphasized there were more issues to be discussed beyond the auto industry.

"Clearly, the auto sector is important to the country. It's important to the national economy, so therefore it is important to Saskatchewan as well," said Wall.

"But you know we need to be even-handed about these things, because we've had the cattle sector under some significant stress for some period of time, post-BSE, so we need to have an even-handed recognition of other sectors that are facing difficulty as well ..."

Manitoba Premier Gary Doer said Ottawa has to be aware of what other jurisdictions are doing for their manufacturers.

"Nobody likes subsidies but Canadians have to compete on a level playing field," Doer said.

"Ontario is a very strong economy. It has been very important for Canada and will continue to be very important for Canada. . . . The stronger Ontario is, the stronger everyone is," he said.