Andrew Coyne explains it well in MacLeans: "We'll pay for this bailout for years". Some "highlights":
Federal and Ontario governments gave $10.6 billion: 1/5 as much as the U.S.
Canada and Ontario will have 11.7% equity in the company, paying $9 billion for an equity stake worth $58 million.
The governments have pledged to sell off their stake a little at a time over the next nine years. If the stock grows 5 times in value over those years, the return will only be two cents on the dollar.
GM and Chrysler will sell 400,000 vehicles in Canada. Each one was subsidized by $32,000, which is more than the average price of a new car.
After GM finishes restructuring, will directly employ just 5,500 workers. The cost for each job saved is almost $2 million.
The $13 billion overall bailout is equal to two points of the GST.
GM could have declared bankruptcy six months ago but didn't. In the meantime, it has lost almost $100 million per day. Canadian bailout money doesn't even offset that.
No one can say the CTF didn't try to stop this madness.
Wednesday, June 10, 2009
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