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Federal and provincial politicians yesterday slammed Chrysler LLC's threat to move production from Canada if it doesn't get government loans and union concessions, but said governments cannot let the company's tactics get in the way of protecting Canadian jobs.

Ottawa and Ontario have said they are prepared to offer loans to Chrysler and General Motors of Canada Ltd. to help them survive, so long as the United States provides support and the companies show credible plans to remain viable over the long term.

Industry Minister Tony Clement said the government's position hasn't changed just because Chrysler president Tom LaSorda issued a blunt warning at a Commons committee, one that Canadian Auto Workers has characterized as blackmail.

"This isn't about Chrysler or Tom LaSorda or GM or the president of GM or quite frankly about the CAW. This is about the one in 10 workers in Canada whose jobs are connected in some way to a properly functioning auto sector. That's what I'm focused on," he said.

Mr. Clement has warned General Motors and Chrysler would face tremendous pressure to move operations to the United States - crippling the parts industry here - if the American government provided loans but Canada did not.

Opposition leaders slammed Chrysler over the threat and said it makes it harder to win public support for a bailout. But they urged the government to move quickly to provide aid for the ailing sector, including Chrysler.

"I think what matters is the jobs, what matters are the workers," Liberal Leader Michael Ignatieff said in an interview. He said it is critical that the two governments work with the companies and the union to find a solution to the crisis, which threatens not only GM and Chrysler assembly plants but the companies' Canadian suppliers and dealers.

"The government should be saying that threats are not helpful but let's continue to talk about how to make sure we can create a viable Chrysler production line in Canada, period."

At Queen's Park, Ontario Economic Development Minister Michael Bryant fired back at Chrysler, calling the auto maker's threat to pull out of Canada "ham-fisted."

Asked whether Mr. LaSorda's threats set back the negotiations, Mr. Bryant said it's "business as usual."

"They're going to want to continue to keep profitable plants operating in Canada. His investors will want him to continue to work with us."

At the committee hearing, Mr. LaSorda said the company needs Canada Revenue Agency to show some forbearance in a tax dispute over more than $1-billion in taxes that Chrysler paid in the United States but Revenue Canada says should have been paid here.

The tax agency has placed a $500-million lien on Chrysler's Brampton, Ont. plant, and withheld more than $335-million in tax rebates as collateral until the matter is resolved by an arbitrator.

He demanded a letter from the agency, saying it would not seek further security on the tax bill. Revenue Minister Jean-Pierre Blackburn said yesterday that he could not discuss the specific case, but said the agency has a mandate to resolve tax disputes in a way that protect both the public and the individual taxpayer.

With files from Greg Keenan

and Karen Howlett