Americans are still waiting to hear the final verdict on a proposed federal bailout of the struggling U.S. auto industry, but Canadian Industry Minister Tony Clement says he expects the White House will offer a deal in the near future.
Clement told CTV's Question Period that he believes the White House feels a bailout is inevitable given the state of the economy, and that it will act sooner rather than later to support its national automakers.
"The Bush administration has made it pretty clear that they think that a rescue is necessary to save the entire industry, to keep the economy from going further into troubled waters in the United States," he said during his Question Period appearance on Sunday.
"So I expect over the next few days the U.S. administration to cross some t's and dot some i's," he added.
But Clement's remarks came on the same day that the White House signalled there would be no decision on an auto industry bailout on the weekend or by Monday morning.
A $14 billion short-term loan package failed to gain approval from the U.S. Congress last week, leaving the struggling automakers twisting in the wind as their cash reserves dwindle.
General Motors announced Friday that it will shut down nearly all production at its North American plants throughout the month of January.
Both GM and Chrysler have said they are on the brink of bankruptcy, while Ford has said it may see similar troubles if its Detroit Three peers crumble in the near future.
The White House announced last week that it may dip into the US$700 billion bank bailout fund to help the auto sector.
Clement announced last week that the Canadian and Ontario governments would offer 20 per cent of the emergency aid package handed down in the United States -- but that support was contingent on the American government agreeing to a deal.
What if the bailout is rejected?
When asked by CTV's Craig Oliver what would happen if the U.S. does not come to an agreement on how to help the auto industry, Clement acknowledged it would cause serious problems for the Canadian economy.
Because the Canadian auto sector exports about 90 per cent of its products to the U.S. market, he said, there is little that can be done if the American market dries up.
"Unless there is a fix in the United States, it's very difficult for us to do something independently of that," Clement said.
The industry minister also said Canadian officials continue to monitor the situation closely and that both Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty remain "very personally engaged in this file."
Federal NDP leader Jack Layton said Sunday that he thinks the Canadian government should be acting to help the auto industry now, rather than waiting for the U.S. package to be offered first.
"We're in a position to help shape the direction of these discussions," he told CTV's Question Period, following Clement's appearance. "And why not?"
Layton said automakers should be aiming for a new business model that will see them building better automotive products that are green-friendly and more competitive.
"It's a golden opportunity to come up with a green car strategy and transform the industry," Layton said.
"It's time to get moving. The Americans, I'm sure, are going to insist on this, at least I hope they do, once Obama takes the reins."
With files from The Associated Press
