Canadian taxpayers will fall about $3.5-billion short of breaking even on the money the federal and Ontario governments invested in the bailouts of Chrysler Group LLC and General Motors Co. in 2009.
The federal government’s sale of the remaining 73.389 million common shares it held in GM will close the book on the investment and the auto maker’s period of being derided as “Government Motors.”
Ottawa will raise about $3.2-billion from the sale, based on a report from Bloomberg Tuesday that the stake it sold to Goldman Sachs & Co. was priced at $35.90 (U.S.) a share.
A report on the auto rescue done by the Auditor-General last year said the two governments had received $5.4-billion (Canadian) of the $13.7-billion they contributed to the bailouts of the two auto giants.
Since then, GM bought back about $400-million (U.S.) in preferred shares and the Ontario government sold its remaining shares for $1.1-billion (Canadian), before the final sale by the federal government this week. That brings the total proceeds to the governments to around $10.2-billion.
The share sale by Ottawa will help federal Finance Minister Joe Oliver balance the federal budget.
But Jerry Dias, president of Unifor, which represents workers at GM plants in Oshawa, Ont., St. Catharines, Ont., and Ingersoll, Ont., said the government should have kept its shares and used the ownership as leverage to force GM to re-invest in Oshawa and St. Catharines.
“It is remarkably short-sighted of the federal government to sell off its shares in GM at a time when there has been widespread agreement that securing GM’s future in Canada is critical,” Mr. Dias said in a statement.
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