Like the proverbial frog in the pot of water that supposedly doesn’t realize how hot the water is getting until it is too late and it boils to death, our respective federal and provincial governments (Conservative and Liberal – this is a non-partisan rant) are sitting in a hot tub of epic proportions with the auto bailouts.
A mere 4 or 5 months ago, the total bailout amounts being discussed for Chrysler and GM were in the range of $3 to $4 billion dollars. And those amounts were greeted with howls of outrage from taxpayers and others.
Flaherty’s latest trip to the deficit cupboard was necessitated in part by a ballooning estimate of $10 billion required by GM and Chrysler from the Federal and Provincial treasuries (i.e. taxpayers). And while McGuinty predicts that the current Ontario deficit should be able to handle the increased bailout funds needed, he also couches his confidence with this: “We're going to keep an eye on it.” In other words, expect to see us back for more later.
And none of this comes with any guarantees whatsoever. There’s nothing to say that $10 billion will be the end of it. GM will still likely go into bankruptcy, and will probably be broken up. Chrysler may yet end up consolidating operations in the US, leaving Canada with nothing but future loft condo properties where factories used to employ thousands.
Actually I misspoke. There is one guarantee, and that is that the taxpayer will never be repaid those billions in ‘loans’ to the auto industry. That you can bet on.
So one has to wonder what the current situation would be if the discussions back in the fall were about a $10 billion dollar (or more) bailout. Would our political ‘frogs’ have jumped right back out of the pot? Or would they have settled in for a nice, long soak?