The government of Ontario is calling on the Canadian government to sell off its shares in GM, obtained as part of a bailout package for the automaker in 2009.
Canada’s $13.7 billion bailout package resulted in the government of Ontario and the Canadian federal government holding roughly 9 percent of GM’s common stock. But Dwight Duncan, Ontario’s finance minister, wants to see those shares sold. Duncan told The Globe and Mail
“There are certain restrictions on how many we can move at once and so on, but the sooner we’re out of the stock the better…I just don’t think governments should be buying and holding stocks in private-sector companies.”
The shares are worth an estimated $3.5 billion, money that is sorely needed by both governments to pay down their deficits. But selling the shares at their current price would mean a significant loss for taxpayers. GM’s shares currently list for around $26 a share, but that would have to rise to more than double for taxpayers to break even on the bailout.
Canada last sold shares during the November, 2010 IPO, when it pocketed $424 million. The $3.5 billion made this time around would help the federal government balance its books prior to an upcoming election rumored for 2015, but would mean a multi-billion dollar loss with respect to the bailout funds and GM’s shares.