Financial support to automotive sector helped short-term viability, weak information and monitoring

Financial support to automotive sector helped short-term viability, weak information and monitoring


In our audit of the support to the automotive sector, we looked at how Industry
Canada, the Department of Finance Canada and Export Development Canada managed the
$9 billion of financial assistance provided by the federal government to support
the 2009 restructuring of the Canadian operations of Chrysler and General Motors.
 
This financial assistance involved complex
transactions, high uncertainty, and tight time frames.
 
These circumstances had an impact on what Industry
Canada could do to manage the assistance.
 
We found that Industry Canada, Finance Canada, and Export Development
Canada managed the financial support to the automotive sector in a
way that contributed to the viability of the companies and the
competitiveness of the sector in Canada over the short and medium terms.
 
Industry Canada adequately assessed the
recovery prospects of Chrysler and GM.
 
The Department also monitored the companies’
production commitments in Canada.
 
However, we also identified weaknesses in the way the assistance was managed and reported.
For example, Industry Canada had limited information
on concessions and pension plans, making it
difficult for the Department to understand the
impacts on the long-term viability of the companies.
 
Also, there was no comprehensive reporting to Parliament
of information about the restructuring assistance.
 
In the future, the Government of Canada may again be required to
provide financial assistance to a large company or an entire economic
sector. For this reason, we believe it is important that the
government use this opportunity to learn from its recent experience.
 

Leave a Reply

Your email address will not be published. Required fields are marked *