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The federal government's proposed sale of its substantial ownership stake in General Motors Co. represents both a major success story and a sign of serious trouble.

At first glance, Minister's Flaherty's proposed sale of the federal government's General Motors shares – part of a 140 million share stake acquired by the feds and the Ontario government during the 2008 bailout – puts an end-bracket on an unmitigated success story. One of Canada's largest industries, and significant contributor to gross domestic product was saved. Once effectively bankrupt, GM's shares now trade above $36 (U.S.).

The math, however, is not that simple. Including bailout costs estimated at $10.8-billion (provided by both the feds and the Ontario government), the GM stock price is about $14 below the level where the government would break even.

The annual run rate for government subsidies for the auto industry is about $200-million and this figure shouldn't be brushed under the table, either.

Though auto subsidies remain the subject of heated political debate, few deny that the 2008 bailout was necessary. A full implosion of the Canadian auto sector would have been an economic disaster of biblical proportions. Windsor, Oshawa, and Brampton would likely all be filing for bankruptcy right alongside Detroit. Tens of thousands of jobs, and the consumer spending that resulted, would have been gone for good.

The rescue was necessary but the industry's future is now increasingly uncertain. Canada is no longer an obvious destination for auto company investment. The dollar is close to par (important for U.S.-based companies paying Canadian dollar wages) and U.S automakers somehow managed to delegate the financial responsibility for U.A.W. members' healthcare expenses in 2007, eliminating the appeal of Canada's socialized health care system.

Mexico, on the other hand, does look like an attractive destination for big investments, even with the ongoing, tragic violence at the border. Audi, a subsidiary of Volkswagen AG, recently announced a 1.3-billion (U.S.) investment in Mexico and Nissan earmarked $2-billion for the country in 2012. In Canada, General Motors reneged on an understanding that it would continue to build the Camaro in Oshawa, choosing to shift production to Michigan in 2015.

Auto workers argue that the $200-million in annual government subsidies is well spent – their wages support consumer spending and the subsidized industry buys parts and materials from a myriad of peripheral businesses. But lower income Canadians will shed few tears for the declining auto industry, whose subsidies represent a transfer of wealth from poor to rich – income tax deducted from lower pay cheques goes to auto workers that out-earn them by two or three times. Non-auto sector employees could counter that the same economic benefit could be had if the $200-million were spent to support other industries where wages are lower.

In the end, the bailout was a success in many ways. But a look under the surface suggests that if current trends continue, a reshaping in public policy may be on the horizon.

Editor's note: This article incorrectly stated the number of General Motors shares held by the federal government as 114 million. The total stake acquired by both the federal government and the Ontario government is approximately 140 million shares. Also, the article implied that the cost of the GM bailout was $13.7-billion. This figure was in fact the total cost of the auto bailout to both GM and Chrysler. Additionally, the description of GM's decision to shift production of the Camaro to Michigan was unclear. GM currently manufactures the Camaro in Oshawa and is planning to shift production to Michigan. The Globe regrets the errors.

Scott Barlow is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here to read more of his Insights , and follow Scott on Twitter at @SBarlow_ROB .