Quebec waiting for 1987 loan to GM to be repaid
January 4, 2012 , by
Nicholas Maronese
(CBC)
Matching $110 million federal and provincial loans due 2017
The factory in St. Therese, Quebec where General Motors once put together Camaros and Firebirds is no longer standing, but the provincial loan they received for it is
outstanding.
GM assembled Chevrolet Camaros, Pontiac Firebirds and other models in the plant until 2002, and in 1987 got a $110-million interest-free loan from the Quebec government to add a paint booth to it, reports the
Vancouver Sun.
They haven't paid back a penny on it.
Investment Quebec is claiming the loan as a potential default — though GM claims they still plan to pay back the 25-year-old loan — and now critics and analysts are holding it up as an example of how public subsidies and loans to corporations don't make sense.
The $110-million loan from Quebec, for a new paint booth and to retool the plant to build the Oldsmobile Ciera, was matched by a similar $110 million federal loan. Both are due 2017.
An Investment Quebec official noted most debtors don't pay off a loan until it's due, so GM has time; the automaker insists they will still pay it off, said a spokesperson.
Critics say these investments favour certain companies over others, and don't demonstrably create jobs. But spokespeople for GM and Toyota confirmed potential government investment plays a major role in determining where they establish new manufacturing facilities or operations.
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