OTTAWA, TORONTO -- Industry Minister Jim Prentice says Ford might yet qualify for federal help to reopen an engine plant in Windsor, Ont., because Ontario manufacturers would be eligible to tap the Harper government's $1-billion economic hardship fund if the province agrees.
But he emphasized yesterday it's up to Ontario to work with Ottawa to set the proper ground rules for the fund.
His comments came one week after federal Finance Minister Jim Flaherty rejected a direct subsidy of the Ford Motor Co. of Canada Ltd. plant. Mr. Flaherty's comments seemed to close the door to federal assistance.
But in what could very well be a federal election year, Mr. Prentice was clearly trying to correct impressions yesterday, demonstrating that the Conservatives are not deaf to hardship in the auto sector - especially in vote-rich Ontario - and have other ways to help.
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The $1-billion fund will be part of the 2008 budget expected in several weeks and so its future will be conditional on the package passing. While opposition parties have complained about tying it to the budget, none have said they will proceed to defeat the fiscal plan under these circumstances. The government only needs the support of one opposition party to pass the budget.
Mr. Prentice said Ontario's share of the $1-billion fund is about $350-million and manufacturers such as Ford will be able to apply for relief if Ontario Premier Dalton McGuinty agrees to criteria for the cash that includes this sector.
It's up to premiers and Ottawa to hammer out terms stipulating what type of relief each provinces' slice will cover.
"I'd simply encourage the [Ontario] Premier to work with us to make sure that it's worded in such a way that it would apply to include the manufacturing sector, including the automotive sector within that," Mr. Prentice said in an interview.
"If it is broadly enough stated ... it can apply to those kinds of projects," he said, referring to Ford's initiative to revive the engine facility.
Ford is seeking $60-million in federal and Ontario government help to reopen its Essex Engine Plant in Windsor to assemble a new, more fuel-efficient V8 engine, according to industry sources who say Ontario has pledged $30-million.
Mr. Prentice said the Harper government's distaste for direct subsidies still stands.
"Mr. Flaherty has spoken about that we're not into direct subsidies to business, but this community trust fund is one that will have application in the manufacturing sector."
Canadian Auto Workers president Buzz Hargrove was bearish on whether tapping the $1-billion fund will work for Ford, saying he fears the federal budget will be defeated.
Even if the budget does pass, it could take several weeks for that particular piece of legislation to be approved and for the money to start flowing, he said. "Ford may be gone," Mr. Hargrove said.
Industry sources said Ford has been pushing Ottawa for a decision by Feb. 1.
"They're going to take an awful beating publicly if they don't do this thing with Ford," Mr. Hargrove said.
But he added it's too early to assume that if Ottawa doesn't give Ford the money it wants, then General Motors of Canada Ltd. will also be denied the assistance it is seeking to build a six-speed transmission at a plant in St. Catharines, Ont.
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