By on November 30, 2012

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.

 

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13 Comments on “Ontario Pushing To Dump GM Stock At A Significant Loss...”


  • avatar
    mike978

    I am surprised to hear the Federal Government needs to sell since its debt is low : http://en.wikipedia.org/wiki/Canadian_public_debt

    The lowest in the G7 at <40% of GDP. They don`t need the money and could easily wait.

    • 0 avatar
      Neb

      This is true, both of the Fed and Ontario. Considering the completely messed up provincial political situation, I assume this finance minister Duncan is just looking to score points with whoever doesn’t believe governments should hold stock.

  • avatar
    D in the D

    Well, one reason I see for them doing this is to get out before the U.S. starts selling their much larger share. If they both sold at the same time, they’d both get a big haircut together. Neither government got into this for a profit. Their missions are over.

  • avatar
    Tortoiseme

    the Federal gov’t is fine, it’s the provincial Liberals who want/need the cash. Minority government that recently ripped up some public sector contracts and had their leader step down unexpectedly.
    I’m guessing that if they could liquidate their position independant of the feds they would be doing so now.

  • avatar
    86er

    Does Ontario still *have* a government?

  • avatar
    mikey

    @ 86er…To answer your question, no, we do not “have” a government. The Premier quit, a judge just fired the Toronto mayor.

    The feds say “no” we are not selling our shares. The Americans are not selling thier shares. So no government.nowhere, is selling thier shares.

    Nothing to see here folks.

  • avatar
    kps

    I’m shocked — shocked! — to find the Ontario Liberals proposing something yielding “a significant loss for taxpayers”.

  • avatar

    Mikey is partial correct about Ontario not having a Government, what the Premier did was prorouge Parliament as he was in deep sh! So many problems from Wind Mills to Orange Ambulance Service to many others, this system was practised by the current Tory Government a couple years back to get him(Mr. Harper)out of sh! too, its a component of the Parliament system we got from the United Kingdom, Its all legal and Ontario is being run by the Lt.Governor,and Council the Hon David Onley, who uses a Scooter to move about due to him being crippled from World War two injuries, there will be a new Premier some time in January 2013!

    • 0 avatar
      Dimwit

      That’s not particularly funny. Onley has polio and through therapy has been able to come back from severe paralysis.

    • 0 avatar
      ranwhenparked

      Would you prefer the system we have in the states? Seriously, be thankful for what you have – it works, and it’s comparatively civil. The Lieutenant Governor has a truly thankless job, and Ontario is lucky to have a man the caliber of David Onley.


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